Mr. Brian Cowen:

No, I think, I'll be honest with you, I think that there was a whole number of reasons why we ended up where we ended up, but it's not based on Government proposing that regulation was not important and you needn't worry about it, and don't do it, and let people do what they like. That was never ... there was no licence in the public policy area for anyone to be involved in some of the practices that they were involved in.

The problem, I agree, with principles-based legislation is that it doesn't talk about proportionality, which is fine, it does talk about flexibility, which to my mind is fine, it does talk about various other things, but it doesn't abdicate people from doing their job. And it wasn't the case that we had set up a statutory framework where people didn't have the powers to do their job. The job wasn't done. And there are a number of reasons for that, and some of the problems can be regulatory capture, it can be too much deference, it can be complacency, it can be too trusting of the governance mechanisms of the banks, it can be a whole range of things.

But you know, when the Taoiseach was talking about ... the then Taoiseach was talking about competitiveness, yes, he was interested in competitiveness, he was interested in improving standards of living, of increasing the diverse sectors in the economy, including this one. But I don't accept - and it's not me trying to just throw back a point to you - I just don't accept that principles-based regulation was the reason why we had the crash. I'm saying that there was another place, in Spain, where you had rules-based regulation, and you had the crash. It's down to people implementing the frameworks they have effectively, keeping distance, being rigorous, looking at worst-case scenarios, thinking outside the box, not taking people's assurances, you know. And at the end of the day, the thing about principles-based regulation is it imposes a very heavy duty on management and boards of directors of financial institutions to make sure that they are working in accordance with the framework that's set out, and clearly they weren't.