WHEN THE GAME CHANGES A PATH TO RECOVERY AND RENEWAL FOR THE IRISH ECONOMY

Ronald Greenspan Senior Managing Director FTI Consulting March 26, 2009

THE iSSuES bEHiNd THE HEAdliNES

TABLE OF CONTENTS

Introduction...................................................................................................3 The.intrinsic.strengths.of.the.Irish.economy.....................................................4 Current.situation. ...........................................................................................5. . The.tipping.point.............................................................................................6 Government.response.to.date..........................................................................7 Framework.for.immediate.action.....................................................................8 . . . Resolve.the.banking.crisis.........................................................................8 Rebuild.confidence.and.goodwill............................................................. 11 Address.public.finance.and.regulatory.concerns. ..................................... 12 .

Conclusion.................................................................................................... 15.

INTRODUCTION

The world is in the midst of a crippling recession and financial crisis which has brought with it a systemic de-leveraging, restructuring and outright re-invention of the global marketplace. Despite the recent rise of protectionist rhetoric, if ever there were doubts about the interdependence of the global economy, those doubts have been put to rest for good. While the degrees and timing vary, every developed country is experiencing economic pain and struggling with finding hindsight explanations, short term cures and long term solutions. Ireland is no exception, and in fact it encountered severe economic challenges – and enacted dramatic solutions – earlier than most other economies, including its peers in the European Union. It was the first euro zone economy to enter recession, the first to inject its own capital into its banking system, and the first to introduce dramatic restrictions to its public spending programs. As such, its economic challenges and responses thereto are more advanced than many other Western nations. Now, in some ways, Ireland finds itself economically trapped. The industry sectors which had helped fuel its record growth – real estate, financial services and export manufacturing – are the primary sources of its economic problems today. Further increases in government spending to stimulate the economy are impractical or unavailable due to deterioration in public finances, rising borrowing costs, and a perceived risk of default. However, the government has taken strong action to date, and we believe additional action, if coordinated and communicated thoughtfully, can sow the seeds of genuine recovery. The current scale and globalization of problems are unique, but the pathways toward recovery have been put to the test repeatedly and always involve fixing the banking system and restoring confidence within all constituencies. This paper provides a framework for immediate action, based on FTI’s decades of experience advising governments and financial institutions facing comparable situations. Our recommendations center around three key themes: Resolve the banking crisis Rebuild confidence and goodwill for long term recovery Address public finance and regulatory concerns

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INTRINSIC STRENGTHS OF THE IRISH ECONOMY

Global economic platform and unique potential as “gateway to Europe” Educated, open and creative workforce with proven ability to adapt to economic dynamics and support inward investment History of strong democratic institutions, social collaboration, and public-private partnerships
As.with.many.other.developed.economies.today,.Ireland.is.struggling.with.one.of.the.most. severe.economic.setbacks.in.its.modern.history..It.has.been.hit.by.a.“perfect.storm”.of. economic.calamities,.including.failures.of.the.banking.system,.GDP.contraction,.sprawling. government.deficits,.and.a.reputational.crisis.of.confidence.among.both.global.investors.and. the.domestic.population..Combine.these.dramatic.threats.with.a.broad.global.recession.and. financial.crisis.and.Ireland’s.challenge.of.recovery.appears.extremely.daunting;.if.one.were. to.believe.some.accounts.in.the.mainstream.media,.recovery.is.nearly.impossible..However,. given.our.experience.advising.governments.and.private.institutions.through.major.financial. challenges.and.transformations,.we.are.confident.that.Ireland.will.persevere.through.the. current.economic.crisis.and.emerge.a.stronger,.brighter,.more.confident.nation.on.the.world.stage.. When.we.study.the.fundamental.strengths.and.underlying.assets.of.the.Irish.economy,.we. identify.a.variety.of.attributes.which,.if.harnessed.and.managed.properly,.can.serve.as. building.blocks.in.a.coordinated.effort.to.achieve.short.term.stabilization.and.long.term. recovery..In.fact,.these.same.attributes.are.largely.responsible.for.Ireland’s.record.growth. over.the.two.decades.culminating.in.2007.and.can.serve.to.fuel.not.just.domestic.economic. recovery.but.a.furthering.of.Ireland’s.strong.position.in.the.global.economy. — . . Fully globalized economic platform..Ireland’s.strength.in.export.manufacturing.has. positioned.it.as.a.valuable.link.in.the.global.supply.chain,.and.its.geographic.location.and. English.speaking.population.make.the.country.a.reliable.“gateway.to.Europe,”.particularly. for.U.S..businesses..According.to.the.United.Nations,.in.2007,.foreign.direct.investment. (FDI).equaled.81.percent.of.Ireland’s.GNP..(See.Figure.1). —. Highly educated, open and flexible labor market..Ireland’s.highly.skilled.workforce.has. a.proven.ability.to.adapt.to.changing.economic.conditions.and.engage.with.government. to.form.and.accept.important.workforce.related.policy.solutions..This.is.evident.in.the. scale.and.speed.of.the.cost.adjustment.currently.underway.across.the.economy.and.the. general.public.acceptance.of.its.necessity. —. Relatively low government debt entering the current crisis..Even.in.the.midst.of.the. current.economic.crisis,.Ireland’s.sovereign.debt-to-GDP.ratio.was.still.projected.to.be. a.relatively.low.41.percent.at.the.end.of.2008.1.While.this.figure.is.set.to.rise.in.the.near. term,.it.is.lower.than.many.other.developed.economies,.including.Germany,.France.and. the.United.States.. —. Track record of innovation..Ireland’s.strong.educational.infrastructure,.entrepreneurial. culture.and.creative.workforce.have.enabled.the.rapid.development.of.knowledge.based. industries,.particularly.over.the.past.fifteen.years,.and.remain.the.focus.of.the.Irish. Government’s.industrial.development.policy. —. Modern infrastructure..Throughout.the.economic.growth.phases.of.the.past.two. decades,.the.Irish.government.has.invested.heavily.in.important.elements.of.national. infrastructure,.including.public.transport,.education,.healthcare.and.communications,. among.other.areas..Today’s.Ireland.is.built.on.a.vastly.improved.and.modernized. infrastructure.compared.to.both.the.previous.generation.and.many.of.its.international. peers,.particularly.among.the.newer.EU.member.nations. —. Strong democratic and social institutions..Ireland’s.unique.Social.Partnership.model. has.been.widely.credited.and.respected.for.bringing.together.government,.employers.and. unions.to.negotiate.workforce-related.issues,.including.wages.and.working.conditions.. The.current.crisis.represents.an.important.test.of.the.effectiveness.of.this.model.of.policy. formation.and.social.responsibility.

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—. International goodwill..The.envy.of.other.countries.of.similar.size,.Ireland.enjoys. widespread.positive.awareness.of.and.sentiment.toward.its.people.and.culture.around.the. world,.most.notably.in.the.United.States..This.has.resulted.primarily.from.an.expansive. worldwide.Diaspora..For.two.centuries,.the.Irish.have.made.the.world.their.home,.in.the. process.spreading.goodwill.and.establishing.critical.mass.in.many.of.the.world’s.major. economies..The.current.crisis.demands.that.now.is.the.time.for.that.goodwill.to.be.harnessed. We.believe.that.Ireland’s.current.economic.turmoil.results.not.from.any.fundamental.shortage. or.lack.of.the.core.assets.required.for.economic.prosperity,.but.from.a.number.of.specific. financial.industry.attributes.and.regulatory.weaknesses..This.means.that.a.well.designed.and. broad.based.recovery.effort.can.be.effective..Thoughtfully.capitalizing.on.the.positive.assets. inherent.in.the.Irish.economy—both.those.listed.above.and.others—will.be.essential.for. Ireland.to.navigate.the.short.term.crisis.and.rebuild.its.platform.for.long.term.recovery.and. economic.growth.. Figure 1: FDI as Percentage of GDP, 2007
160 % 140% 120% 100% 80% 60% 40% 20% 0% South Korea China Netherlands Hungary Switzerland Denmark France OECD-27 Ireland GNP Ireland GDP New Zeland Germany Italy Sweden UK Spain Finland Poland US India Singapore Japan 2007 2000

Source: Forfás Calculations; UNCTAD World Investment Report 2008

CURRENT SITUATION

Economic dependence on real estate, financial services and export led manufacturing Recessionary “triple play” of excessive risk, inflated asset values, and global contraction threatens to erode global competitiveness Strong government response to date must be extended in a more integrated manner
Ireland.has.experienced.two.distinct.phases.of.spectacular.growth.over.the.past.two.decades.. The.first,.beginning.in.the.mid-1990’s,.saw.the.expansion.of.the.financial.services.sector. and.the.formation.of.a.robust.export.led.manufacturing.economy,.both.driven.in.part.by. government.tax.reductions,.particularly.on.corporations.and.capital.gains..This.period.of. growth.also.harnessed.a.massive.competitive.advantage.in.terms.of.the.country’s.high.skilled,. lower.wage.work.force.which.was.essential.to.attracting.development.investments.from.multinational.corporations..The.second.growth.phase,.largely.taking.place.from.the.early.to.middle. part.of.the.current.decade,.saw.the.furthering.of.export.led.manufacturing.but.this.time. accompanied.by.a.strong.rise.in.real.estate.demand.and.home.values..This.phase.was.fueled.by. a.low.interest.rate.environment.resulting.from.Ireland’s.membership.in.the.European.Monetary. System,.widespread.access.to.credit,.and.aggressive.lending.practices.by.the.country’s.largest. banks..By.the.middle.of.this.decade,.Ireland’s.construction.sector.comprised.23.percent.of. GDP,.the.highest.such.concentration.in.Europe.(see.Figure.2)..According.to.the.Irish.Central. Statistics.Office,.one.in.five.private.sector.workers.depended.on.the.construction.sector.for. employment. As.a.result,.by.2007,.in.our.view,.the.structure.of.Ireland’s.small,.open.economy.was. dangerously.skewed.toward—and.dependent.on—continued.inflation.of.property.values. and.activity.in.the.construction.sector..While.this.phenomenon.was.also.present.in.most.

WHEN THE GAME CHANGES—A PATH TO RECOVERY AND RENEWAL FOR THE IRISH ECONOMY

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other.developed.economies,.particularly.the.United.States,.Ireland’s.small.and.less.diversified. economy.was.more.vulnerable.to.reversals.in.these.areas.and.the.inevitable.international. systemic.shocks..In.addition,.the.other.pillar.of.Irish.expansion,.export.led.growth.in. manufacturing,.further.increased.vulnerability.as.the.country’s.main.trading.partners.were. themselves.hit.by.the.most.severe.economic.downturn.since.World.War.II. Figure 2: Construction as Percentage of GDP, 2005
25 % 20%

% of GDP

15% 10% 5% 0%

THE TIPPING POINT

As.was.the.case.in.the.United.States,.the.aggressive.risk.taking.of.Ireland’s.financial.system. to.fund.the.over.heated.property.sector.led.to.a.housing.bubble.which.was.increasingly. vulnerable.to.collapse..At.its.peak.in.2006,.the.Irish.residential.property.sector.saw.the. creation.of.90,000.new.units..In.contrast,.by.2009,.fewer.than.23,000.units.are.expected.to.be. completed.2.The.decline.in.home.prices.began.in.early.2007,.and.average.prices.are.expected.to. fall.by.more.than.40%.when.all.is.said.and.done.(see.Figure.3)..By.early.2008,.the.real.estaterelated.losses.inflicted.on.the.major.Irish.banks.were.severe,.and.their.share.prices.plummeted,. ultimately.destroying.nearly.90.percent.of.the.market.capitalization.of.the.Irish.banking. sector..The.share.price.collapse.of.Anglo.Irish.Bank,.the.most.aggressive.real.estate.lender,. destroyed.nearly.€13.billion.in.wealth.from.its.peak.in.2007.(see.Figure.4).. By.the.middle.of.2008,.the.globalization.of.the.credit.crisis,.which.had.begun.in.the.United. States,.compounded.the.effects.on.Ireland’s.economy.of.its.bursting.domestic.real.estate. bubble.and.the.deepening.global.Great.Recession..The.contraction.of.global.markets.was.felt. throughout.the.export-driven.manufacturing.sector,.the.other.major.growth.engine.within.the. economy..Ireland’s.manufacturing.advantage.had.already.been.weakened.by.a.decline.in.wage. competitiveness.since.2000.and.the.gradual.decline.of.the.value.of.the.British.pound.versus. the.Euro..The.growth.rate.of.exports,.which.had.been.6.8.percent.in.2007,.fell.to.just.over.1. percent.in.2008.and.is.expected.to.be.negative.in.2009,.potentially.erasing.all.growth.since.2005.3 The.rapid.decline.of.the.property.and.export.manufacturing.sectors.and.the.accompanying. crisis.in.the.banking.system.sparked.the.current.economic.turmoil.facing.the.country..For. the.first.time.since.1997,.the.Irish.unemployment.rate.crossed.into.double.digits,.reaching. 10.4.percent.as.of.February.of.2009..Gross.national.product.is.forecast.to.contract.by.nearly. 8.percent.in.2009.and.another.3.5.percent.in.2010,.one.of.the.fastest.paces.of.any.developed. country..This.decline.brings.with.it.a.severe.reduction.in.tax.revenue,.which.was.forecast.to. drop.as.much.as.24.percent.in.2009.before.the.government’s.recent.actions.4.While.Ireland’s. situation.is.directionally.the.same.as.most.of.its.Western.peers,.it.has.been.and.will.be. disproportionately.affected.by.the.ongoing.global.contraction.

WHEN THE GAME CHANGES—A PATH TO RECOVERY AND RENEWAL FOR THE IRISH ECONOMY

Po ain rt ug al Fi nl an d N et Ital y he rla nd D Eu en s ro ma co r ns k tr uc Au t st ria Sw UK itz er la nd Fr an Be ce lg i G um er m a Sw ny ed en

Ire la n

d

Sp

6

Figure 3: Average home price, Ireland
450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 96 97 98 99 00 01 02 03 04 05 06 07 08 09 (projected)

Source: Reuters EcoWin

Figure 4: Share price performance, Irish bank sector
17.5 15 12.5 10 7.5 5 2.5 0

Vol (m)

Price (€)

25 0 2007 2008 Banks (rebased) 2009

Date

Alglo Irish Bank Corporation PLC

GOvERNMENT RESPONSE TO DATE

The.“triple.play”.of.excessive.risk,.unsustainable.asset.price.inflation,.and.global.contraction.has. had.a.highly.damaging.effect.on.Irish.society,.setting.up.the.economy.for.a.protracted.decline.. In.an.effort.to.combat.the.crisis,.the.Irish.government.has.acted.quickly.on.a.number.of.fronts. and.with.a.vast.policy.toolkit,.including.capital.injections.in.national.banks,.guaranteeing.all. bank.deposits,.public.payroll.reductions.and.many.other.items..Government.should.be.praised. for.its.immediate.use.of.policy.to.“stop.the.bleeding,”.particularly.when.some.of.these.policy. decisions.were.bound.to.be.unpopular.and.controversial..Indeed.government.had.no.choice. but.to.act.immediately,.and.in.some.cases.with.very.little.historical.precedent,.such.as.the.full. nationalization.of.Anglo.Irish.Bank. However,.the.threats.to.economic.stability—let.alone.recovery—are.as.present.as.ever,.even.if. they.have.changed.form.to.some.degree..Government.now.must.navigate.two.more.emerging. threats.to.Ireland’s.recovery.efforts:.the.growing.budget.deficit,.projected.to.reach.11. percent.of.GDP.by.the.end.of.2009,.and.deflationary.pressure,.with.the.consumer.price.index. projected.to.fall.up.to.4.percent.by.the.end.of.2009.5.These.two.threats.in.particular.jeopardize. the.government’s.short.term.prospects.for.stabilizing.the.banking.system.and.accelerating. economic.recovery,.and.will.have.to.be.factored.into.the.next.phase.of.policy.decisions..

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FRAMEWORK FOR IMMEDIATE ACTION

Resolve the banking crisis Rebuild goodwill and confidence for long term recovery Address public finance and regulatory concerns
At.FTI.Consulting,.our.experiences.with.financial.crises,.both.economy-wide.macro.economic. and.company-specific.micro.economic.events,.have.shown.the.importance.of.bold,.decisive. and.comprehensive.action.to.bring.relief.and.stabilization.in.the.early.stage.of.a.crisis..It.is. important—and.reassuring—to.remember.that.other.countries.similar.in.size.to.Ireland.have. thrived.following.abrupt.economic.declines,.including.the.Netherlands,.Sweden,.Denmark.. and.Finland.. In.the.early.1990’s,.Finland.was.struggling.with.its.own.credit.and.banking.crisis,.which.led.its. GDP.to.decline.by.11.4.percent.and.unemployment.to.rise.as.high.as.15.percent..Early.in.the. recession,.the.Finnish.government.prioritized.two.principles.to.guide.the.recovery.process:. restore.confidence.and.achieve.stability..As.government.carried.out.major.policy.decisions,. particularly.painful.spending.cuts.to.shore.up.public.finances.and.a.bank.stabilization. program,.these.two.guiding.principles.helped.to.ensure.that.the.public.felt.a.sense.of. emergency,.understood.the.required.sacrifices,.and.accepted.government.actions.as.a.catalyst. for.long.term.recovery.6.After.three.years,.an.export.led.recovery.was.well.under.way.and.the. seeds.of.innovation.and.skills.development.were.planted..Today,.despite.its.relative.small.size,. Finland.is.widely.regarded.as.an.advanced.knowledge.economy,.with.Harvard.Business.Review. just.this.month.ranking.it.the.world’s.second.most.innovative.country.after.the.United.States.7 Compared.with.the.early.1990’s,.however,.the.world.today.is.unmistakably.interconnected.and. Ireland.is.embedded.firmly.as.a.member.of.the.global.economy,.subject.to.its.whims.and.with. little.control.over.its.overall.trajectory..In.fact,.according.to.the.Economic.and.Social.Research. Institute,.Ireland.is.so.internationally.dependent.that.if.the.global.economy.were.to.grow.5. percent.above.trend,.then.Ireland’s.gross.national.product.would.grow.7.5%.above.trend,. unemployment.would.decline.by.3.5.percent.and.government’s.need.for.borrowing.would. decline.by.3.5.percent.. However,.waiting.for.the.resumption.of.global.economic.growth.is.not.an.option..Hope.is.not. a.strategy,.as.they.say..The.immediate.threats.to.Ireland’s.economy—bank.instability,.lack.of. growth,.and.mounting.budgetary.deficits—are.too.great..Government.has.already.taken.bold. steps.to.alleviate.stresses,.but.a.great.deal.more.is.required..In.the.following.pages,.we.outline. three.key.areas.where.government.must.act,.supported.by.an.all.encompassing.program.for. engaging.and.communicating.with.domestic.and.international.stakeholders.

RESOLvE THE BANKING CRISIS

Create system of evaluating, distinguishing, and prioritizing bank assets Create clearinghouse or public exchange for transfer of distressed assets designed to maximize economic value as determined on a case by case basis Distinguish between and deal forthrightly with banking industry liquidity problems and credit-loss issues Strengthen government oversight of bank asset resolution process
Unlike.the.recent.banking.upheavals.in.the.United.States.and.United.Kingdom,.the.Irish. banking.crisis.is.not.related.to.exotic.lending.products.and.risks.embedded.in.financial. engineering..Rather,.it.stems.from.excessively.risky.lending.to.construction.and.property. development.companies.and.increasingly.lax.direct.consumer.lending.practices,.both.of. which.resulted.from.an.aggressive.fight.for.market.share.among.the.country’s.top.national. banks..Anglo.Irish.Bank,.in.particular,.grew.at.36.percent.per.year.at.the.height.of.the.cycle,. increasing.its.share.of.the.market.from.3.percent.to.18.percent.in.ten.years.8.

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Unable.to.increase.commercial.loans.at.rates.substantially.in.excess.of.the.rate.of.economic. growth,.banks.increasingly.lent.against.hard.assets..Capital.injected.into.this.market,.including. from.international.wholesale.money.markets,.produced.a.self-perpetuating.cycle.of.increased. values,.allowing.yet.more.lending.and.in.turn.pushing.values.even.higher..However,.as.with. all.asset-based.lending,.repayment.is.wholly.dependent.upon.maintenance.of.asset.values..The. inevitable.collapse.of.the.real.estate.bubble.resulted.in.a.dramatic.decline.in.collateral.values,. a.dramatic.increase.in.loan.loss.provisions,.and,.as.a.result.of.diminished.capital.resources,.a. widespread.freeze.on.credit.in.all.sectors.and.the.economic.activity.it.helps.to.produce.. In.response.and.to.prevent.a.liquidity.crisis,.last.fall.the.government.took.unprecedented. action.by.guaranteeing.all.bank.deposits..This.was.followed.by.the.complete.nationalization. of.Anglo.Irish.Bank.in.January.of.2009.and.a.re-capitalization.of.the.two.other.largest.Irish. banks,.Bank.of.Ireland.and.AIB.Bank..While.we.believe.these.actions.were.necessary.and.in. fact.courageous,.the.alarming.result.is.that.the.value.of.total.bank.liabilities.now.guaranteed. by.the.government.is.double.gross.national.product..This,.combined.with.reduced.confidence. in.Ireland’s.sovereign.debt.by.international.investors,.has.left.the.country.highly.vulnerable,. particularly.in.the.face.of.further.global.and.domestic.economic.decline. The.situation.in.Ireland’s.banking.sector.generally.mirrors.the.current.situation.in.the.global. banking.system..The.global.banking.crisis.was.initially.manifest.as.a.liquidity.crisis—the. inability.of.banks.to.borrow.from.each.other.and.in.the.credit.markets.and.concern.about. the.stability.of.the.depositor.base—potentially.leading.to.an.uncontrolled.“run.on.the.bank”.. Aggressive,.coordinated.action.by.most.of.the.Western.banking.regulatory.authorities,. including.raising.or.eliminating.altogether.limits.on.insurance.of.depositor.accounts.and. interbank.transactions,.ended.this.first.stage.of.the.crisis..However.the.official.language.of. policy-makers,.and.seeming.government.actions,.continue.to.focus.on.liquidity.issues..An. example.is.the.U.S..government’s.TARP.program,.enacted.by.Congress.in.October,.2008,.and. continued.discussions.of.how.to.remove.“toxic”.assets.from.the.balance.sheets.of.banks—as. if.the.exchange.of.cash.for.these.assets.will.single-handedly.transform.the.industry..Focusing. on.liquidity.was.appropriate.in.the.initial.stages.of.the.crisis.when.that.was.the.problem,. and.continued.discussion.of.this.topic.is.much.easier.for.governments.and.politicians.since. liquidity.issues.can.be.solved.at.minimum.cost.to.the.public..However,.the.global.crisis.has. moved.on.from.liquidity,.and.the.current.phase.must.address.the.impact.of.actual.credit.losses. on.bank.balance.sheets. Create system of evaluating, distinguishing and prioritizing bank assets..With.the.initial. crisis.abated,.the.critical.question.now.is.how.best.to.stabilize.the.banking.system.and.return. it.to.health—a.necessity.if.it.is.to.play.its.rightful.role.in.promoting.future.economic.growth.. Key.to.this.task.is.dealing.with.the.impaired.assets.which.sparked.the.crisis:.Ireland.must. decide,.as.has.been.done.in.every.prior.modern.banking.crisis,.how.best.to.identify.and.value. these.assets,.how.to.maximize.recovery.with.minimal.damage.to.the.financial.and.broader. economic.systems,.and.how.to.distribute.the.ultimate.economic.losses.fairly..How.prudently. and.effectively.these.issues.are.resolved.will.determine.how.quickly.Ireland.recovers.and. how.robust.is.subsequent.economic.growth..But.even.with.good.ideas,.the.sheer.volume.of. troubled.assets.held.by.the.affected.institutions.presents.a.significant.practical.challenge.to. implementing.any.program.quickly..Many.of.the.distressed.assets.will.realize.increased.value. over.time.while.others.may.not..From.our.experience,.making.these.distinctions.will.require. that.bank.management—and.government—have.access.to.enhanced.information.and.be. incentivized.to.make.decisions.which.ensure.the.optimum.economic.outcome.for.the.Irish. economy..Appropriate.information.will.enable.the.primary.actors.to.make.better.decisions.and. the.government.to.have.an.informed.oversight.role.and.enact.policies.which.take.into.account. the.long.term.recovery.of.the.banking.and.financial.system.. An.array.of.political.and.social.pressures.will.arise.attempting.to.influence.the.resolution.of. these.assets..However,.policy.should.be.designed.first.and.foremost.to.distinguish.between. assets.worth.retaining.for.a.long.term.resolution.process.and.those.assets.whose.social.and. economic.value.are.maximized.through.a.short.term.maintenance.and.accelerated.resolution. process..Information.should.also.be.made.available.to.the.general.public.to.increase.the. transparency.of—and.confidence.in—the.process.

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An.example.of.our.experience.with.such.a.process.is.C-BASS,.a.New.York-based.holder.of.credit. sensitive.residential.mortgage.assets..In.2008,.C-BASS.was.in.default.on.almost.$5.billion.of. bank.debt.and.repurchase.obligations..Its.portfolio.consisted.of.a.broad.range.of.distressed. assets.including.performing,.non.performing,.subprime,.Alt-A,.second.lien.and.other.types. of.residential.loans,.all.of.which.needed.to.be.assessed.and.segmented.carefully.in.order.to. maximize.the.collective.economic.value.and.long.term.recovery.potential.of.the.portfolio. through.enhanced.servicing.practices,.opportunistic.market.priced.discounted.sales,.long. term.earn-outs.and.a.variety.of.other.tools.at.our.disposal..C-Bass.controlled.a.best-in-class. mortgage.servicing.company,.whose.capital.needs.and.threatened.value.deterioration.made. it.uneconomic.to.maintain.as.part.of.C-BASS..Therefore,.while.many.of.the.assets.were.judged. to.return.maximum.value.by.continued.aggressive.management.and.earn.outs,.the.mortgage. servicing.business.was.sold.for.over.$400.million.to.Goldman.Sachs..A.favorable.outcome.is. only.possible.on.an.individual.credit.basis,.and.for.the.financial.industry.as.a.whole,.if.the. assets.and.liabilities.are.carefully.analyzed.and.the.most.appropriate.resolution.technique.for. each.situation.is.employed. Create clearinghouse or public exchange for transfer of distressed bank assets.. Hand.in.hand.with.the.above,.we.recommend.establishing.a.real.estate.clearing.house,.or. asset.exchange.marketplace,.to.facilitate.the.identification,.segmentation,.valuation,.and. transaction.of.properties.either.singularly.or.as.portfolios..In.a.time.of.less.sophisticated. information.technology,.a.similar.exercise.was.undertaken.by.Resolution.Trust.Corporations. (RTC),.which.was.established.following.the.collapse.of.the.savings.and.loan.industry.in. the.United.States.in.the.late.1980’s.and.early.1990s..Despite.two.failed.attempts.prior.to. constituting.the.RTC,.and.slow.start.even.for.this.entity,.ultimately.it.proceeded.with.what. has.been.widely.viewed.as.an.effective.and.expedient.resolution.process.that.led.to.economic. recovery..Information.and.auction.technologies.which.have.developed.in.the.fifteen.years. since.the.completion.of.the.RTC’s.efforts.would.make.these.efforts.even.more.efficient.and. transparent.today. Distinguish between and deal forthrightly with banking industry liquidity problems and credit-loss issues..As.mentioned.earlier,.largely.because.the.initial.bold.actions.to.address. liquidity.issues.were.successful,.liquidity.is.no.longer.the.primary.problem.preventing.the.Irish. banking.industry.from.recovering.and.playing.its.necessary.role.fostering.broader.economic. recovery..Instead,.the.problem.today.is.one.of.actual.credit.losses.and.the.corrosive.effect. they.have.had.and.that.future.write.downs.will.continue.to.inflict.on.bank.capital..Unlike. relatively.cost-free.liquidity.solutions,.there.is.no.low-cost.solution.to.credit.losses.and. impaired.capitalization—these.are.real.losses.that.have.been.and.will.continue.to.be.suffered. by.the.banking.industry..Until.government.moves.to.address.this.issue.and.recapitalize.the. banking.system,.the.sector.will.remain.weak,.delaying.a.robust.economic.revival..The.pace.of. economic.recovery.will.depend.on.the.pace.of.educating.the.public.and.building.a.political. consensus.around.how.these.past.and.future.losses.will.be.allocated.between.shareholders,. creditors.and.the.taxpayers;.who.will.bear.the.economic.risk.of.recapitalizing.the.banking. industry;.and.how.the.ultimate.profits.from.the.rebuilt.industry.will.be.shared..As.part.of. this.process.and.a.quid.pro.quo.for.what.will.surely.be.taxpayer.contributions,.government. must.reassure.the.broader.public.that.there.exists.a.set.of.guiding.principles.such.that.the. resolution.and.rebuilding.process.will.be.structured.with.the.proper.incentives.to.ensure.that. the.final.outcome.will.support.economic.regeneration.and.social.priorities. Strengthen government oversight of bank asset resolution process..We.understand.and. agree.with.government’s.proposed.approach.of.maintaining.a.distance.from.bank.management. and.demanding.the.boards.of.the.institutions.retain.responsibility.for.the.resolution.process.. However,.the.unprecedented.government.financial.stakes.in.these.institutions.also.demand. a.new.structure.of.oversight..Either.through.a.newly.formed.oversight.board.or.through.an. existing.regulatory.body,.a.singular.guardian.entity.should.be.appointed.to.ensure.that.the. agreed.asset.resolution.strategy.is.actually.being.executed,.funding.is.getting.to.those.who. need.it,.and.government.imperatives.are.being.delivered.at.the.consumer.level..This.oversight. panel.in.turn.should.be.accountable.to.the.legislature.and.the.larger.body.politic.

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REBUILD CONFIDENCE AND GOODWILL

Create and announce a comprehensive, multi-year renewal campaign Embrace maximum transparency Harness the nation’s goodwill around the world Ensure fair retribution…later
Confidence.in.the.Irish.economy,.and.the.investment.opportunities.it.presents,.has.been. dramatically.shaken.at.precisely.the.point.in.time.when.it.is.most.essential..The.Irish. population.is.confused.and.anxious.about.their.quality.of.life.and.the.fate.of.their.competitive. position.in.the.global.marketplace..Global.investors.are.pricing.Irish.debt.investment. unfavourably.out.of.fear.of.the.potential.of.default..Multinational.corporations.are. questioning.whether.Ireland.is.a.sufficiently.stable.place.to.conduct.business..Addressing.. this.widespread.crisis.of.confidence.is.an.essential.and.immediate.step.toward.recovery. We.recommend.that.government.introduce.a.bolder,.farther-reaching.public.communications. strategy.based.on.a.credible,.thoughtful.plan.with.both.short.term.and.long.term.objectives. and.expectations..In.the.absence.of.constant,.day-to-day.evidence.of.vision.and.leadership. from.government,.the.media.and.public.could.remain.dangerously.obsessed.with.retribution,. with.blaming.bank.executives,.regulators.and.government.officials.for.the.crisis.and. demanding.“punishment”.in.any.form.available..It.is.the.role.of—and.opportunity.for— government.leaders.to.discourage.such.behavior.and.channel.this.national.energy.into.a. forward-looking.vision.for.the.future.of.Irish.prosperity.. While.government’s.aggressive.capital.spending.campaign.has.introduced.new.programs.to. help.those.in.lower.income.brackets,.first-time.home.buyers,.and.the.temporarily.unemployed,. these.policies.have.been.announced.with.minimal.long.term.context..This.also.applies.to. the.global.investor.population,.who.have.not.seen.sufficient.evidence.of.government’s. comprehensive.strategy.for.ensuring.short.term.and.long.term.stability—economically,. financially,.politically.and.socially..Without.communicating.a.bold.long.term.framework.for. recovery.and.clear.criteria.for.decision-making,.the.trust.of.investors.and.the.general.public.. is.likely.to.remain.shaky. Certain.decisions.and.commitments.are.bound.to.have.highly.unpopular.implications..One. controversial.example.of.expenditure.reduction.was.government’s.decision.in.July,.2008.to. reduce.public.payroll.by.three.percent.across.the.board.through.a.combination.of.taxes.and. pay.cuts..This.generated.significant.protest,.but.has.since.been.accepted.as.necessary.action. designed.to.accelerate.recovery.and.produce.broader.economic.benefits.for.all..This.fair.and. widespread.distribution.of.the.economic.burden.is.the.spirit.through.which.all.policy.decisions. should.be.communicated.. Authoritative.and.influential.media.are.consistently.critical.of.government’s.initial.process.of. financial.reform..The.international.reporting.of.regulatory.failures.and.continuing.stress.in. Irish.banking.is.eroding.Ireland’s.hard-earned.reputation.within.international.capital.markets.. This.is.most.apparent.in.the.current.cost.of.government.debt,.waning.confidence.from.the. major.ratings.agencies,.and.other.factors..Credible.structural.reform,.properly.communicated,. will.be.a.first.step.towards.rebuilding.trust.with.international.institutions..Once.international. support.begins.to.emerge,.by.any.measure,.it.can.be.leveraged.to.reflect.favorably.on. government’s.program.of.financial.and.economic.reform. Create and announce a comprehensive multi-year renewal campaign..To.inspire. the.nation’s.population.and.earn.back.the.confidence.of.the.international.community,. we.recommend.that.Ireland.launch.a.comprehensive.campaign.of.communications.and. engagement.to.demonstrate.unprecedented.commitment.from.government.leadership.to. fundamental.economic.reform.and.renewal..We.recommend.this.campaign.comprise.a.variety. of.distinct.efforts.aimed.at.each.of.three.key.audiences.with.three.distinct.interests:.global. investors,.multi-national.corporations,.and.the.general.public..Each.audience.should.have.its. own.advocate.at.the.highest.levels.of.government.who.will.offer.ongoing.day-by-day.dialogue.. Government.should.report.on.campaign.progress.frequently.including.public.disclosure.of.any. unforeseen.setbacks.as.well.as.any.and.all.positive.economic.data.

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Embrace maximum transparency..Government.should.err.on.the.side.of.over-communicating. when.it.comes.to.sharing.its.strategy,.decisions,.progress,.and.milestones..Effective. communications.can.rebuild.trust.quickly;.performance,.over.time,.will.rebuild.confidence.. By.harnessing.the.power.of.technology,.government.can.and.should.provide.dedicated. web.sites.and.direct.electronic.communications.to.the.broad.population,.as.well.as.venues. and.materials.tailored.for.the.international.community.of.investors.and.multi-national. corporations..A.searchable.public.database.of.all.public.spending.and.investments,.for. example,.could.be.created.and.launched.in.the.near-term..Resources.will.be.required.to.fund. these.efforts,.but.their.costs.will.be.minimal.compared.to.the.value.of.the.goodwill.earned..In. addition,.we.recommend.that.government.adopt.a.coordinated.communication.program.with. intermediaries,.such.as.rating.agencies,.economic.commentators,.and.financial.journalists,. and.any.erroneous.information.published.in.the.public.domain.should.be.quickly.addressed. and.corrected..In.a.practical.sense.this.will.require.assembling.and.tailoring.much.of.the. information.already.produced.and.making.it.available.through.key.on-line.“economic.renewal”. information.sites. Ensure fair retribution…later..The.public.desire.for.immediate.punishment.of.unethical.and/ or.criminal.activity.is.natural.and.understandable,.but.government.has.a.responsibility.to. express.empathy.while.encouraging.patience.in.matters.of.retribution..The.problem.deserving. focus.at.the.moment.is.the.way.forward.toward.stabilization.and.recovery;.retrospective. retribution.should.come.later.and.government.must.promise.a.fair.process.when.the.time. comes..It.will.be.important.to.punish.wrongdoers,.but.it.is.absolutely.essential.to.institute. systems.and.regulations.that.effectively.prevent.a.reoccurrence.without.choking.off. appropriate.risk.taking.and.capital.markets.innovations.. Harness the nation’s goodwill around the world..Unlike.most.other.countries.its.size,. Ireland.enjoys.massive.cultural.awareness.and.positive.sentiment.around.the.world,.largely. due.to.the.enormous.Irish.Diaspora..Like.China,.India.and.Latin.America,.Ireland’s.built-in. “sales.force”.of.expatriates.can.have.significant.impact.on.global.perceptions.and.willingness. to.help..Studies.have.shown.that.Diasporas.can.bring.benefits.in.a.variety.of.forms,.including. remittances,.knowledge.and.innovation.transfer,.direct.investments,.donations.and.word. of.mouth.support..This.goodwill.too.often.goes.untapped,.and.now.is.the.time.for.Ireland.to. engage.this.community.in.a.meaningful.way.

ADDRESS PUBLIC FINANCE AND REGULATORY CONCERNS

Strengthen bank regulatory framework, ensuring separation of consumer protection and macro-prudential oversight Engage social institutions in fiscal policy and capital spending
As.mentioned.earlier.in.this.paper,.the.recovery.of.both.the.Irish.banking.system.and.the. broader.economy.are.highly.dependent.on.the.level.of.confidence.felt.by.the.general.public,. international.investors,.and.multinational.corporations..While.we.believe.resolving.the. banking.crisis.is.the.most.important.and.immediate.action.required,.it.also.will.be.essential.for. government.to.reassure.these.constituencies.that.it.is.actively.addressing.regulatory.reform. and.the.increasing.budget.deficit,.as.both.of.these.factors.are.integral.to.rebuilding.confidence. in.Ireland’s.long term.prosperity. Ireland’s.traditional.bank.regulatory.structure.consists.primarily.of.the.Irish.Financial.Services. Regulatory.Authority.(IFSRA).and.the.central.bank..While.neither.entity.can.control.interest. rates.given.Ireland’s.membership.in.the.European.Union,.they.do.collectively.have.a.variety. of.tools.available.for.monitoring.and.managing.the.financial.system,.including.the.setting. and.enforcement.of.lending.standards..A.lack.of.strong.regulatory.oversight.of.bank.lending. practices.was.a.key.enabler.of.the.over.heating—and.ultimate.collapse—of.Ireland’s.real. estate.sector,.which.in.turn.was.a.primary.catalyst.of.the.current.economic.crisis..In.light.of. these.failures,.government.has.already.introduced.a.number.of.reforms.and.programs.in.areas. such.as.remuneration.for.senior.banking.officials,.the.appointment.of.independent.directors.to. bank.boards,.and.the.introduction.of.statutory.codes.of.conduct..Moreover,.the.government. has.formed.a.task.force.to.review.and.institute.comprehensive.regulatory.reforms..

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We.believe.it.is.crucial.that.the.government.act.quickly.and.decisively.to.announce.and. implement.major.reforms.in.the.regulatory.framework..Further.one-off.actions.will.prove.to. be.ineffective.unless.they.are.communicated.in.the.context.of.an.integrated.set.of.reforms. designed.fundamentally.to.overhaul.the.financial.system..Only.such.decisive.change.can. restore.confidence.among.already.shaky.international.investors.in.particular,.who.will.be. essential.for.Ireland’s.short.term.and.long.term.economic.recovery. Strengthen bank regulatory framework..As.is.the.case.elsewhere,.the.new.situation. whereby.government.is.now.both.policy.maker.and.a.significant.shareholder.in.most.of.the. major.Irish.banks.has.created.particular.regulatory.complexities..In.this.new.world,.a.new. regulatory.framework.must.be.established.quickly.to.prevent.the.perception—and.reality—. of.government.having.conflicting.roles,.having.to.balance.the.concerns.of.bank.managers,. customers,.taxpayers.and.shareholders..Such.conflicts.will.compromise.any.efforts.to.rebuild. confidence.in.the.regulatory.function..We.believe.that.given.the.current.lack.of.confidence,. government.must.take.unusual.steps.to.engage.the.Social.Partners.and/or.other.influential. social,.labour.and.economic.organizations.to.provide.input.to.the.process..Government.should. lead.the.process.and.make.final.decisions,.but.buy-in.from.the.public.is.essential.for.success.. Moreover,.government’s.ultimate.role.should.be.designed.to.avoid.direct.management.of.bank. business.practices;.government.should.provide.strong.principled.oversight.rather.than.getting. involved.with.management.functions.which.could.be.vulnerable.to.ongoing.political.pressures.. As.an.influential.American.journalist.recently.described.the.need.for.an.overall.financial. regulatory.guardian:.The question is how much power to give it. The easy answer: enough to protect the system but not so much that it micro manages business executives or consumers who may choose to take prudent risks.9 Separate the consumer protection function from macro-prudential oversight..In.our. view,.the.consolidation.of.regulatory.oversight.responsibilities.has.proven.to.be.less.effective. than.what.is.required..For.example,.early.signs.of.macro.economic.and.systemic.stress.were. not.factored.into.oversight.decisions.on.adequacy.of.reserves.or.of.lending.principles..In.order. to.distribute.accountability.more.effectively,.we.believe.that.the.twin.functions.of.consumer. protection.and.macro-prudential.oversight.need.to.be.carried.out.by.separate.and.politically. independent.entities.. In.addition.to.strong.regulatory.protection,.the.state.of.public.finances.is.also.directly. related.to.consumer.confidence.domestically.and.investor.confidence.internationally.. Whether.justified.or.not,.the.current.perception.of.Irish.sovereign.debt.having.a.meaningful. risk.of.default.is.anathema.to.the.process.of.economic.recovery.and.must.be.considered. in.conjunction.with.all.policy.initiatives..In.addition,.the.fear.that.government’s.financial. position.is.producing.strong.deflationary.pressure.is.further.deteriorating.confidence.in. Ireland’s.ability.to.reclaim.a.position.of.competitiveness.in.the.global.supply.chain..These. matters.demand.immediate.responses.from.policy.makers. The.Irish.government.deserves.praise.for.having.initiated.a.variety.of.cost.controls,. expenditure.program.reviews.and.financial.emergency.measures..Government.has.announced. extensive.public.investments.totalling.nearly.5.percent.of.GDP,.the.largest.such.program.in.the. European.Union..As.reassurance.against.the.perception.of.careless.spending,.government.has. also.set.a.public.target.of.keeping.the.general.budget.deficit.limited.to.9.5.percent.of.GDP.in. 2009.and.reducing.it.to.below.three.percent.by.2013.10 However,.there.is.much.more.for.government.to.do.before.public.finances.can.be.considered. anywhere.near.stabilized..Even.with.optimal.fiscal.policy,.government’s.newfound.ownership. and.guarantee.of.bank.assets.means.that.the.government’s.capital.requirements.have. increased.dramatically.at.a.time.when.confidence.in.Ireland’s.government.debt.has.eroded.. To.put.it.simply,.Ireland’s.ability.to.raise.capital.from.investment.sources.is.very.limited.and. very.expensive..And.the.sudden.emergence.of.a.large.deficit.means.a.response.and.effective. communication.program.should.be.formulated.quickly.. Engage social institutions in fiscal policy and capital spending..Perhaps.the.most.significant. challenge.in.addressing.the.budgetary.position.is.securing.public.support.for.decisions.. Given.the.intensity.of.the.crisis.and.the.sensitivity.of.taxpayers.and.the.investing.public,.we. recommend.that.government.work.closely.with.the.Social.Partners.and.other.influential.social.

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bodies.to.review.the.level.of.required.resources.to.support.the.national.infrastructure.and.use. rapid,.yet.thoughtful,.consensus-building.to.agree.major.fiscal.policy.decisions..In.this.manner,. tax.increases.and.targeted.spending.reductions.are.more.likely.to.be.accepted.as.a.rallying. cry.for.the.nation.to.unite.behind.reforms.and.recovery..In.addition,.government’s.aggressive. capital.spending.programs.can.be.refined.and.positioned.as.targeting.the.most.critical.areas. of.national.infrastructure,.such.as.energy,.communications.and.transportation..However,.it.is. important.to.caution.that.open.negotiation.and.third.party.validation.must.not.be.allowed.to. delay.decision-making..

CONCLUSION

Ireland.will.emerge.and.recover.from.the.current.economic.crisis..While.we.recognize.that.the. “Great.Recession”.is.thrusting.national.economies.around.the.world.into.uncharted.territory,. we.believe.that.Ireland.has.the.intrinsic.economic.assets.which,.if.managed.properly,.will. enable.short.term.stabilization.and.long.term.economic.recovery. However,.it.cannot.be.over-stated.that.economic.recovery.is.dependent.on.the.stabilization. and.reform.of.Ireland’s.banking.system,.in.terms.of.troubled.asset.resolution,.recapitalization. and.regulation,.and.the.rapid.rebuilding.of.confidence.within.both.domestic.and.international. stakeholder.communities,.including.consumers,.corporations.and.investors..These.priorities. must.be.addressed.as.quickly.and.thoughtfully.as.possible,.with.a.view.toward.producing.the. maximum.impact.in.the.immediate.short.term. While.other.economic.threats—including.the.budget.deficit,.deflationary.trends,.and.waning. global.competitiveness—are.adding.significant.pressure.on.government.decision-making.and. policy.formation,.we.believe.that.these.threats.can.in.part.be.alleviated.by.repairing.the. banking.system.and.restoring.confidence.with.a.view.toward.restarting.growth..Economic. growth.will.improve.employment,.increase.tax.revenue,.and.deter.deflation,.but.such.growth. will.not.come.until.and.unless.the.banking.system.is.stable,.sound.and.trusted.

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AUTHOR BIOGRAPHY

Ronald.Greenspan.is.an.internationally.renowned.finance.and.business.reorganization. specialist.with.extensive.hands-on.experiences.resolving.the.periodic.banking.crises.over.the. past.three.decades..After.leading.a.US.based.Savings.&.Loan.Association.in.the.1980’s,.he.was. chosen.in.1992.by.the.Resolution.Trust.Corporation.(RTC).as.the.Real.Estate.and.Business.expert. on.its.first.Settlement.Workout.Asset.Team.(better.known.as.SWAT.Team).and,.following.its. very.successful.operation,.was.appointed.to.the.RTC’s.initial.California.SWAT.Team.to.handle. the.RTC’s.largest.and.most.problematic.asset.resolutions.. As.one.of.the.world’s.leading.financial.institution.and.restructuring.experts,.Mr..Greenspan. was.appointed.leader.of.PriceWaterhouse’s.Asian.Financial.Advisory.Services.Practice.during. the.“lost.decade”.of.the.middle.and.late.1990’s.where,.amongst.his.accomplishments,.he.was. the.financial.advisor.structuring.the.first.portfolio.sale.of.troubled.Japanese.bank.debt.by.the. then.largest.Japanese.Bank,.Bank.of.Tokyo..With.the.merger.of.PriceWaterhouse.and.Coopers. &.Lybrand.to.form.the.largest.global.business.consultancy,.he.was.appointed.the.Global.Leader. of.PriceWaterhouseCoopers’.Real.Estate.and.Financial.Institution.restructuring.practice.until. that.group.was.sold.to.FTI.in.2002,.where.he.leads.the.Real.Estate.and.Structured.Finance. Restructuring.Practice..As.he.has.for.the.past.20.years,.he.currently.is.advising.on.many.of. the.largest.and.most.complex.global.and.domestic.real.estate.and.financial.restructurings,. including.such.well-recognized.matters.as.Lehman.Brothers,.the.largest.firm.ever.for.file. bankruptcy.. Mr..Greenspan.is.well.published.in.leading.industry.publications.such.as.TMA.Journal.of. Corporate.Renewal,.ABI.Journal,.American.Banker,.Daily.Bankruptcy.Review.and.the.Urban. Land.Institute..He.is.frequently.quoted.in.the.Wall.Street.Journal,.Barrons,.Bloomberg.News. and.other.leading.financial.periodicals..Following.his.1998.work.successfully.reorganizing. CriimiMae,.then.the.largest.participant.in.the.Commercial.Mortgage.Back.Securitization. market,.in.2000,.he.published.an.article.in.the.American.Banker.ominously.warning.about. the.next,.potentially.much.larger.mortgage.backed.securities.crisis..While.prophetic,. he.acknowledges.that.the.ultimate.size.and.global.implications.of.the.crisis.we.are.now. experiencing.extend.beyond.even.his.predictions. Mr..Greenspan.has.his.law.degree.magna.cum.laude.from.Harvard.Law.School.and.his. Economics.degree.summa.cum.laude.from.UCLA..He.is.a.frequent.lecturer.at.some.of.the. most.important.educational.conferences.dealing.with.the.current.crisis,.including.the.past. two.annual.conferences.of.United.States.Bankruptcy.Judges,.the.9th.Circuit.Chief.Judges. Conference,.and.Reuter’s.2008.European.Mortgage.Fraud.and.Recovery.Conference.in.London..

Ronald Greenspan

WORKS CITED

1... Monthly Economic Bulletin,.Ireland.Department.of.Finance,.March.2009. 2.. Monthly Bulletin,.Irish.Central.Bank,.January.2009 3.. Monthly Bulletin,.Irish.Central.Bank,.January.2009 4.. Irish Economy,.March.2009,.Pat.Mc.Ardle.and.Lynsey.Clemenger,.Ulster.Bank. 5.. Irish Economy,.March.2009,.Pat.Mc.Ardle.and.Lynsey.Clemenger,.Ulster.Bank. 6.. “From.bust.to.boom:.the.Finnish.economic.recovery.in.the.1990’s”,.speech.by.Finland. Minister.for.Foreign.Trade.Jari.Vilén,.Union.International.Club.in.Frankfurt.am.Main,. November.20,.2002. 7.. Harvard Business Review,.“Tapping.the.world’s.innovation.hot.spots,”.John.Kao,.March.2009 8.. Sunday Business Post,.“Ireland.in.Crisis,”.Patrick.Honohan.and.Philip.Lane,.February.28,.2009. 9.. The Wall Street Journal,.David.Wessel,.“Preventing.the.next.fire.while.this.one.blazes,”. March.12,.2009. 10.. Sunday Business Post,.“Ireland.in.Crisis,”.Patrick.Honohan.and.Philip.Lane,.February.28,.2009.

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