Mr. Cormac Butler:

Broadly speaking, the solution is to bring the bankers and accountants before this committee and to ask them whether they have a problem with AssetCo v. Grant Thornton, with the future of audit, or with the admission of the Institute of Chartered Accountants in England and Wales. If they say "No", the committee must ask them to restate their accounts so that all losses are revealed. If they do that their true solvency position will be shown. A few consequences may arise from that. First, it would be very obvious whether they had been insolvent in 2008. If they were, there is a question mark over the repayment of the promissory notes. Second, if the accounts were prepared correctly it would become very obvious whether the banks were selling customers' assets on a distressed basis after calling in loans. If correct accounting rather than artificial accounting were used, the banks would also have to reveal the subsidy they had given to vulture funds. It would solve numerous problems.

An opportunity arose in Project Eagle, in respect of which subsidies were given. Somebody should have said that, as we do not want this to happen again, corrected procedures must be put in place. If that had happened we would not have as many sales to vulture funds today.