Mr. Frank Daly:

I am keen now to discuss documentation. We have listened carefully to all the evidence presented to this committee over the past two months. If there is one message above all others that has come home to me based on that evidence, it is the fact that we did not document in greater detail and with greater clarity the rationale for key board decisions, especially those taken in December 2013 and January 2014. Those decisions were taken after prolonged debate and discussion by the board.

Given that board members were experienced in financial, property, banking and accounting matters, much of the discussion revolved around the very topics that are now the focus of the committee's attention. These included the issue of the appropriate discount rate that the market would apply to a portfolio such as this, our acceptance of the fact that our carrying value was in excess of the market's valuation of the portfolio and the probability that we would have to take substantial additional impairment on the portfolio in 2014, and possibly later, regardless of whichever strategy was adopted.

As with all board minutes, the minutes of those particular board meetings record the decisions ultimately taken by the board and do not provide a detailed account of the various considerations that were reviewed and discussed as part of the decision-making process. If, at that stage in December 2013 and January 2014, we had any reason to expect that the board papers and the board minutes relating to Project Eagle were going to be subjected to the intensive review that is taking place, I have no doubt that the board would have been more than willing to set out a comprehensive and detailed rationale for its decisions. If we had done so, I have little doubt that many of the issues which have attracted scrutiny from committee members since September would have been much clearer to them and that, as a result, we would all have spent less time now discussing them. That is a lesson that we have learned from this experience. Nowadays, board decisions and the rationale for them are recorded in much greater detail than was the case three years ago.

I will now discuss the position on management of conflicts of interest. The report concludes that Mr. Cushnahan's potential conflicts of interest could not be managed by withholding of debtor-specific information and that NAMA should formally have considered whether his engagement in discussion of its Northern Ireland strategy was consistent with his involvement as a financial adviser to various Northern Ireland debtors. Mr. Cushnahan was a political appointee intended to represent the views of Northern Ireland. I believe that we managed the potential conflicts of interest appropriately within the statutory framework.

The key question to ask in a conflict of interest situation relates to the function of the designated director. It is only if the interest is material to the performance of a function that an actual conflict will arise. In the case of Mr. Cushnahan, his function was to sit on a committee which offered advice to NAMA about Northern Ireland. He had no function in the formulation of NAMA strategy on the sale of Project Eagle or any other loan portfolio and he had no function relating to the management of any debtors or loans or assets.

Should he have disclosed his involvement to PIMCO in 2013? Yes, I think he should have. That alone does not justify the conclusion in the report that the potential conflicts were not appropriately managed by NAMA.

In conclusion, this is the fourth occasion that the CEO, Mr. Brendan McDonagh, and I have appeared before this committee to answer questions on Project Eagle and the second occasion since the Comptroller and Auditor General published his report. In addition, current board members, former board members, members of the executive and the former CFO have also appeared before this committee since the Comptroller and Auditor General published his report. At every one of these appearances, my colleagues and I have answered the committee's questions truthfully and honestly. We have no difficulty with the committee scrutinising our work and questioning our commercial decisions. It is right and proper that the committee does so. We are accountable to this committee and we deliver our testimony to it in good faith. I again wish to thank the committee for agreeing to hear at first hand the perspective of individual board members, current and former, an opportunity which was not afforded to them during the section 9 review. I trust that the committee’s review will take into account the totality of the evidence that has been placed before it.

My colleagues and I have devoted a huge amount of time and resources to appearing before the committee, to answering its questions honestly and to responding to its written requests for information. Since the Comptroller and Auditor General published his report, NAMA has supplied 1,500 pages of responses and records to the committee in addition to the opening statements which have been made by board members and NAMA executives. We take the work of this committee very seriously and we hope that the committee’s further deliberations and final report will be fair, impartial and evidence based.