The Chairman of the PAC has told the head of the Department of Finance that he was deeply disappointed with two reports into the €3.6 bn debt error.

John McGuinness TD told the Secretary General of the Department of Finance that he felt neither report dealt with the issues that had been raised with the previous General Secretary Kevin Cardiff.

The Public Accounts Committee Chairman said that the issue of accountability needed to be addressed.

Referring to the cost of the external report into the accounting error conducted by Deloitte, John McGuinness said that he had made many mistakes over the course of his career but that he had never had to pay anyone €61,500 to tell him what mistake he had made.

Mr McGuinness said that such errors were always blamed on 'systems failures' or on some middle-ranking to junior-ranking staff member but that it was never a senior person standing up to take responsibility.

He said that if senior civil servants were taking their pay cheques then they had a responsibility to stand up and be accountable.

Banks sufficiently capitilised to deal with arrears

Earlier, the secretary of the Department of Finance John Moran told the Public Accounts Committee that he believes the banks are sufficiently capitalised to deal with mortgage arrears.

John Moran said that we wouldn't know the scale of the mortgage problem until we separated the people who couldn't meet their mortgage repayments from those that had decided not to meet their mortgage repayments.

The head of the Department of Finance told the Committee that bank deposits now stood at €150 billion. He said that Irish banks were capitalised to a higher level than other European banks because of the stress tests they were subjected to.

Shane Ross TD said that the selection of the auditors of the banks was of critical importance and expressed concern that bank boards stuck to their auditors like clams and paid them huge sums of money. John Moran said he was happy to raise the issue with the banks but that in his opinion that it was an issue for the banks themselves.

In relation to staffing within the department, Mr Moran said that in relation to mortgage arrears, the had brought across people to work in the Dept with expertise in that area.