Mr. Peter Brown:

There are a lot of things in financial markets which are unpleasant and high risk, such as leveraged products. Securitisation is a way of packaging up assets and cleaning up the balance sheet. One creates some room by hiving these assets off to somebody else who is at a distance and who cannot evaluate it as closely. In doing so, one can do other things and it is thus an accelerant of credit in the market. The markets boom and they bust. They have done that since time immemorial and they are more than likely to do it again.

There are some stunning features of the market at the moment. For example, Irish bond rates are at 0.25%. When we owed €40 billion people would only lend us money at 5% but now we owe €240 billion people want to lend us money at 0.25%. That is a stunning bubble and it has replaced the property bubble on banks' balance sheets. If anything happened to the bond market we would be back to square one. The market is full of risk all the time and securitisation is an accelerant of that so heavy levels of securitisation are not a good idea.