Joe Higgins (Dublin West, Socialist Party)
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Can I put it to you, gentlemen, that already by the 1990s there was a substantial body of study of banking crises internationally, which had all the features, virtually, of what happened in Ireland? Mr. Black, for example, supplements ... or his analysis is supplemented by an article written in 1993 by two Berkeley professors, one of whom, George Akerlof, in a Nobel laureate. I don't expect you or I ... my question isn't predicated on you having read this article. It is referred to by Professor Black in his evidence. The article in question, "Looting: The Economic Underworld of Bankruptcy for Profit", lays out precisely the strategy I have discussed. I quote from that article:

Our theoretical analysis shows that an economic underground came come to life if firms have an incentive to go broke for profit at society's expense (to loot) instead of to go for broke (to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations. Bankruptcy for profit occurs most commonly when a government guarantees a firm's debt obligations.

That was in 1993. Mr. Sheehy, could I ask you why, considering the substantial body of literature that exists and analysis, which I don't have time to go into, why were you chief regulators, or risk officers, and indeed yourselves, as senior officers, were you aware of this analysis of banking crises? Even Sweden, a few years before you came in to-----