Mr. Brian Cowen:

Yes, I mean, obviously, at the time, one was recognising that there was an increasing part of economic activity being taken by the construction sector. Now the responsibility for whether that lending was good or bad should be laid as the responsibility of those who lent it. We live in a market situation here. Those lending decisions were made by bankers and Irish PLCs. Now the question of, did I regard that as an imminent risk, I have to say I didn't regard it as an imminent risk. That's a misjudgment of risk that has taken place. It was basically, again, the belief that, if you look at the demographics, if you look at the increased disposable income, if you look at all of these things that you've heard before, as components in what was driving demand, that that was the reason for it. And there was very low impairment rates on the loans. No one without a job was getting a loan. You know, we had a position where employment was high, prospects were good, people were optimistic about their futures, the medium-term outlook was reasonably good, people were making decisions. And what we were doing ... what I was trying to do was, "Well, look, we need to make sure that the supply side of the house gets to this point quickly because this obviously can't continue ad infinitum", and in fact that's what happened. We got to a plateau and it started to recede.

But the problem is, Deputy McGrath, as you know, that when the financial crisis hit, we were exposed. There's no question about that. And the banks were exposed. But, you know, I'll be honest and say that the 20% year-on-year increase in lending growth was probably something that, in hindsight, needed to be dealt with sooner than it was, but with interest rates reasonably low and staying reasonably low, the price in the property market ... I'd done what I could in relation to the property incentives, so far as they had a major ... People are saying in the research papers on this that attach to the stability reports, that in fact the rate of economic growth is a greater factor in the demand for housing than anything else. So it was our success that was driving this, if you like. People were quite confident about the future and, unfortunately, that didn't work out at the end of the day.

So, to answer your question, did I question it sufficiently? Clearly, it wasn't questioned sufficiently and I accepted the consensus view. I've said in my statement that I wish I were more questioning or that we looked at other scenarios. I just have to accept it. That's an issue to be looked at by this committee. But as I say, there were good grounds for believing it was coming this way rather than that way and the financial crisis decided it came a different way than we thought it would go.