Brian Cowen (Laois-Offaly, Fianna Fail)

We live in a democracy. People have different points of view. I do not know the context in which these comments were made or whether it was a final considered viewpoint. Regardless, the Central Bank in Ireland is part of the wider European Central Bank, which is pursuing the monetary policies of the euro. Our representative there is Professor Patrick Honohan. Members of the Central Bank Commission in Ireland will have differing views across a whole range of issues, I am sure, and bring those perspectives to the table. The result is outcomes which are consistent with the overall thrust of the monetary policy being pursued within the eurozone. There are various people in governments, institutes, think-tanks and central banks who will have views to bring to bear. I am not saying I agree with this particular argument, but it is part of the intellectual exercise we must all undertake to listen to contrarian views, given that we are in a totally new environment. Never have we been in such a position before, and people have to think laterally, in every way they can.

There is no confusion as regards what the policy of the country is, however. We see Ireland's membership of the European Union and the eurozone as being fundamental. Anyone looking at the difficulties we have had in recent times would recognise the assistance the European Central Bank has given to the financial system, generally. Clearly, Ireland would not have had the capacity within the remit of the Central Bank's reserves, to withstand the impact of the economic and financial crisis, were it not a member of a wider eurozone, with the greater capacity and reserves that are available there, together with the fact that the euro has provided us with a level of price stability in the past 11 years that was not available to us heretofore.

What had emerged, of course, in the overall financial regulatory situation internationally as regards how the entire financial system has been globalised, was the fact of the enormous amount of money in the market in terms of its availability, along with the increased competition in banking in Ireland, for example, and what came with that. Having very low interest rates at a time of growth and potential and demand in this economy, meant that many people in the private sector, including those who boosted domestic demand, embraced the opportunities on offer. Clearly, in terms of the regulatory system, the analysis of a well capitalised banking system was wrong, when all this happened. Lessons have had to be learned, and the legislative changes introduced into the Central Bank structure have been a fundamental response to that.

This involved taking on board the lessons of the Canadian system, which is, perhaps, the best example, as probably the only jurisdiction which did not have to recapitalise its banking system as a result of what happened. All of that is the case. I am not in the business of not having people express their views. I want to emphasise that we must all be mindful of how these views are understood and circulated elsewhere, however.

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