minds of investors as to the relevance of other aspects of the reported accounts. but banks could build confidence by going further, to disclose much more information to the market. probably disclosure practices by irish banks were formed during good times, when share prices were high and most of the market analysts following irish banks were equity analysts. credit analysts are different from equity analysts. when stock prices are high, questions of loan losses and defaults are not on people ’ s minds. the equity analyst is looking at growth potential, market share evolution, the competitive environment as it influences spreads, cost control and so on. when stock prices are low, we have moved into a different region of probabilities : the underlying source of volatility of cds and subordinated debt spreads is what needs to be analyzed and it is the credit analyst that comes to the fore. different information flows are relevant to the credit analysts, and this sort of information has been provided by the irish banks only in a limited way and not uniformly as between different banks. there is a lot of information that could be provided. for instance, for the residential mortgage book, which has been much discussed recently, one could imagine much more extensive disclosures about the size distribution, broken down into a variety of sectoral and other classifications. information on the aging and migration of loans between different performance buckets would also help. bottom line : the banks might do well to call in the leading credit analysts and find out what information would be of greatest use to them in identifying and quantifying tail risks. and then provide it. for, if there is no information, the credit analyst tends to assume the worst. they think : “ if the actual situation were good, would the bank not have been at pains to disclose it? ” since it is not disclosed, it must be bad. at present, regulators have been gathering more and more information of this type, and the size and quality of the information set available to the regulators has been improving by leaps and bounds. communicating more information to the market would not only enlist the expertise of market credit analysts in a way helpful to all, but could lower the cost of term borrowing as investors regain confidence. we plan to explore this aspect further with the banks ; they have much to gain and formal regulation here may not be needed. as the information flow to the market improves both in quantity and quality, and especially when the economy improves and the news contained in the information is getting better, we will hopefully move towards the

euthanasia of the irish bank credit analyst ( though not of course of the accountants! ). more important, and more broadly, restoration of market confidence in the banks and in the finances of the irish state will step by step be rebuilt by these and other measures to be contained in the programme on which negotiations have begun. this effort will help set the course of economic and financial policy on a more secure path leading to reduced uncertainty and a return to a sustainable path of employment growth and economic activity. we will have a slimmed down banking system that is much better placed to serve the needs of the economy into the future. while all of this will take some time to be worked through, we can be reassured by the announcements of recent days that the banking system retains the support, not only of the central bank of ireland, but of the european institutions. the globalization unleashed by whitaker ’ s initiatives in the 1950s generated great benefits and lifted living standards over the following two generations. analysing the distinctive structure of the economy that it created requires careful analysis of good accounting data, both national and private. some distortions have undoubtedly resulted in the process of globalization, not least the excessive dependence in the last number of years on foreign borrowing and its consequences. these distortions reflect the phenomenal ability of globalization to generate a rapid amplification of changes that would occur slowly in a closed and inward - looking economy and society. the rapid leap forward of the celtic tiger period was a favourable amplification ; the credit and construction bubble a disastrous one. this perspective suggests that, once we find our stride again, with the renewed help of the international and european partners with which we joined in 1957, 1973 and 1999, a favourable amplification will restore prosperity, albeit of a more sober variety.