Professor Patrick Honohan:

Okay, well, just to clarify a couple of points. The first option, which was where I started before I really looked at the numbers was, "Overcapitalise, put in more than could possibly be considered necessary because, that way, everybody would say 'Well, the Irish banks are overcapitalised.'" And there were countries that were doing that. Switzerland did that, they raised the capital requirement enormously for their big Swiss banks. And it's a standard play book for people in financial crises. Overcapitalise the banks and then you're not going to have a problem and you get the money back later and don't worry about it. But the problem is ... that's okay if the problem is on a scale that the Government can easily - because it will been the Government, nobody else is going to put in that - can it do ... can it put in that amount of money - putting in that amount of money - if it destabilises the Government itself? So we didn't, in any way, short change the banks. We didn't just pay for the first tranche, we paid for all the future tranches but at the percentage losses for the first tranche. And I thought that the percentage loss on the first tranche, which were the biggest loans, I thought they would be the worst loans - they would be the loans that went to the biggest and, you know, most extravagant property developers. That turned out not to be true. But it seemed like a reasonable ... a reasonable benchmark and going to the ... to overcapitalise, that was where we walked into the IMF territory-----