Mr. Peter Nyberg:

On the issue of whether markets are stable, that was what was believed, regardless of what one thinks oneself. That was the prevailing belief in Ireland. It was the prevailing belief in many other countries internationally. Now, of course, when one looks at what happened, it is easy to say that belief was not realistic. At present, the remit of thousands of academicians is to study why the crisis actually happened.

If a government wishes to borrow money from a source other than the central bank, the source will have to be credible. Those who take part in the markets have to be sure that, when the government borrows money, it will be able to pay it back. To that extent, governments are not free to do or be whatever they want. However, as long as market lenders believe the government will be okay, and as long as they believe they will get their money back, governments, within that constraint, are free to pursue whatever policy it deems wise. That is more or less it; I really cannot answer any more on that.