Professor Eamonn Walsh:

The Deputy's question is a great one. The way I would have addressed it would have been to emphasise the notion of an informed user of bank financial statements. An informed user of bank financial statements would understand that these rules exist and therefore would know that during the up cycle the amount of profits is overstated and during the down cycle the amount of profits may be understated. I think the most helpful way I can respond is to say that there is this bundle of rules there and as a result of this bundle of rules, to simply say that profit went up 10% is probably not such a good idea. Instead one has to understand why profits went up by 10% and to what extent the increase was driven by particular twists in these rules with respect to accounting measurement.