Lets take a hypothetical position and assume that our troubled asset management solution has worked beautifully, and is performing miracles in terms of stabilisation of the property market. As far fetched as that all sounds, lets assume that constant in the equation for a second. What other variables in the equation necessitate attention, and can enable us to target efforts to re-build our financial system? This resolution regime does appear to be a very significant variable in the larger equation, and unfortunately, it seems to be one that is lagging behind in it’s progress. Many other contributors here to the Irish Economy blog site, and commentators elsewhere, have suggested a process - whereby the Irish lending institutions should support entreprise in the real economy - and that in turn, is the only way that Irish lenders are going to improve the general health of their balance sheets. Maybe those same lenders have been so badly bitten by the property collapse, they are still paralyzed and cannot move on that front. Perhaps, that is another aspect which reinforces Michael Noonan’s recent suggestion, that many more of the senior management in our lending institutions should move on.

Standing back from all of the above for a moment, (bearing in mind, there are additional components of the equation, such as competitiveness etc, I have not even highlighted), of the three major variables above, which two are lagging behind, and which one has advanced significantly (albeit at a slower pace than one would wish). The answer of course is that the government, for its own part, has progressed the asset management program a good deal. But the other two parts I mention, the lending to the real economy and the resolution regime legislation, has yet to even begin. From a program management point of view, I can detect a severe imbalance in that current state of affairs. Ironically, it appears the variable which most relied upon government’s involvement, is the part which seems to have progressed the most. BOH.