Results 4,361-4,380 of 15,555 for speaker:Eoghan Murphy
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: The application ... and what about then the different variables within the scenarios? Who would decide on those?
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: Okay. When the Central Bank wrote to the institutions in 2006 about conducting a stress test, this was in February and the test took place then over the next couple of months, it didn’t mention the IMF at all. The rationale that was given at the time, from the documentation that has been provided to us about stress testing, was that it was in relation to vulnerabilities highlighted...
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: So it wasn’t to do with concerns highlighted in the financial stability report in 2005.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: Okay. Well, in the documentation that's been received by the committee in relation to the stress testing ... the letters that were issued to the banks doesn’t mention the IMF at all and, in fact, it talks about concerns ... vulnerabilities highlighted in 2005, including very high credit growth, rising indebtedness, property prices rising and increasing concentration on...
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: The general documentation received by the committee.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: Okay.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: And how long would that stress test scenario take place? How long would you give the banks to conduct those tests?
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: Okay. And in the course of those tests being done, the IMF would come to Ireland to participate.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: Okay. In the 2006 stress test there were two scenarios, shock scenario one and shock scenario two. Shock scenario one was the extreme scenario and it included a decline in house prices of 40%. Why was that?
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: That was the extreme scenario, shock scenario one. Shock scenario two was the weak scenario in which the variables change but still for property prices, it includes the same decline, the same rate 40%. Why would that variable be constant across the extreme and the weak stress tests?
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: I'm just not so sure that why in an extreme scenario and in a weak scenario, you'd have the same one particular item and the only item would be a decline in property prices of 40%.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: Yes and it's an extreme scenario-----
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: Okay. In that same year, in a pre-budget letter to the Government and this is in Vol. 1, page 119, you wrote ... the Central Bank wrote ... in its submission that "It seems that a gap may now be opening up between actual prices and prices warranted by fundamentals." Would there be a relationship between that 40% figure and the shock scenarios and in that letter that you wrote to the Government?
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: Vol. 1 ... it's halfway down the page in the box.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: Yes.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: Despite the fact that in your weak shock scenario, you still had a decrease in house prices of 40%.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: Now, the extent of the IMF's involvement in that test of the system, the IMF came in and interviewed the institutions after they conducted their tests. Is that correct?
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: How would it work with the IMF?
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: Okay.
- Committee of Inquiry into the Banking Crisis: Nexus Phase (21 May 2015)
Eoghan Murphy: Okay, well ... I think from documentation we received it would be with individual institutions in relation to the stress testing. But when we look then at the IMF report from 2006 and it's Vol. 2, page 19, and this is the country report from August, it seems clear from that that the IMF is commenting on the stress tests but not commenting on tests that they've been involved in but tests that...