Professor John FitzGerald:

In our role we did not want to get too involved with banks. We did macro-economic scenarios. The difference compared to what the Central Bank and so on was doing was that we used a model, so it was consistent. One did not get a housing price crash and no change in unemployment; one got a housing price crash, unemployment going through the roof and Government revenue collapsing, all coming together which is the way to do it. That was my concern. It was not just the Central Bank. It was interesting doing something similar with a British owned bank. The Bank of England and the Financial Services Authority, FSA, had a similar inappropriate approach to stress testing. I also learned from a third bank where we provide macro-economic scenarios because one of the scenarios it wanted to look at was a liquidity crisis. I should have paid more attention to what I learned from that bank because it was one of the factors that provoked the crisis.