Michael McGrath (Cork South Central, Fianna Fail)
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One of the issues we will be examining is the question which arose in 2008 of solvency versus liquidity in the banks in Ireland. The balance sheets at the time were clearly reporting that the banks were solvent but the question arises of whether adequate provision was made against potential losses or impairments in respect of the assets on the balance sheets. Professor Kane spoke about the incentive to prevent too much recognition of potential losses. Is that an issue of accounting standards or of auditors not having sufficient information or knowledge of the detailed composition of the bank's assets?