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Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: Okay. Would you have a ... okay, if you haven't read it, I'll move on from that. If you could, just briefly describe to me the corporate culture of the bank during your period on the board.

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: How often would the board have social occasions, a dinner, for example, where it would bring in someone from outside of the bank to engage with them, maybe make presentations in an informal way? We have heard here before about a dinner at Heritage House, at which the former Taoiseach attended. Those kinds of engagements ... were you party to any of those types of dinners with the bank...

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: The purpose of those occasions was to hear from the outside experts-----

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: -----to speak to the board.

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: Were you ever at a dinner or a luncheon where a politician attended?

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: Okay.

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: Was that a lunch or a dinner, do you remember?

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: And the purpose would have been to hear from the Financial Regulator about-----

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: Okay.

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: Okay.

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: Okay. Moving on from that to your role as managing director for lending, Ireland, can you tell me a bit about the lending culture under your stewardship because Mike Aynsley also told the committee about a story that was related to him about an auction as a way of illustrating the culture and the lending practices in the bank prior to the crisis? This is what Mike Aynsley said to us, and he...

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: Okay, well, let's look at this change in policy. In the core booklets, in Vol. 1, page 121, is a map of Ireland. It's from a presentation from lending Ireland of 30 April 2007. You've seen this report in the booklets.

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: Yes, so that would have been compiled and put together while you were-----

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: So you were involved in that.

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: There's a map here on page 121 and it is, "Total Drawn Land Balances - €5.29bn Loans by Location as at 30/04/07", and it is up on the monitor there in front of you - €2.7 billion in Dublin, a third of a billion in Meath, a quarter of a billion in Galway, a half a billion in Cork, and it is showing, for each county, the exposures. So was this map presented as a positive to the...

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: Okay.

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: So what was the point or what was the goal of lending Ireland at this point in time in relation to these figures? To reduce them, to increase them, to-----

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: But if you changed the policy in 2006, why did ... and, again, your internal report shows this, that development lending in Ireland accounted for 30.5% of total lending and that it increased by 50% in the previous 12 months. This is in the report of April '07. If the policy changed in '06, how could lending in Ireland increase by 50% in the following 12 months?

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: But 50% is ... I mean, if you recognised something in 2006 and the policy is to try and pull back - I understand the caveat that you put in there - but then to see it still increase by 50% in a 12-month period.

Committee of Inquiry into the Banking Crisis: Nexus Phase (9 Sep 2015)

Eoghan Murphy: So that was a mistake.

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