The Oireachtas banking inquiry was forced to adjourn its hearing with Mr McCreevy at 3.3pm after he refused on a number of occasions to directly answer a question from Sinn Féin's Pearse Doherty.

Mr Doherty asked the former minister if he agreed that there had been a property bubble in Ireland.

Mr McCreevy said there was not a property bubble during his time as minister, from 1997 until September 2004, but declined to comment on the period after that.

Mr Doherty asked the question five times and sought the intervention of the chairman Ciarán Lynch, arguing that tax incentives introduced during Mr McCreevy’s time as minister played a role in the property crash.

Mr McCreevy said he stepped down as a European Commissioner in February 2010 and had taken the decision not to comment on public policy, in spite of several requests to do so.

“I’m not going to break it today,” he said.

The inquiry adjourned at the request of Mr Doherty to consider its options.

After a 17-minute break, the committee resumed with the chairman, Ciarán Lynch, reminding Mr McCreevy that he could be subject to a criminal sanction or an adverse finding in its report by failing to answer a question from the committee.

Mr Doherty then repeated his initial question, to which Mr McCreevy replied that, from 2003 to 2007, all the figures around the property market rose by an “extraordinary degree” and that this could be called a bubble.

When asked by Mr Doherty if various tax incentives he introduced as minister for finance had a role to play in the property bubble, Mr McCreevy said: “I don’t believe that the policies that I pursued created that problem.”

Mr McCreevy said that losing control over interest rates after the State joined the euro in 1999 played a major part in the property bubble that later emerged.

“The loss of interest rates control was big,” he said. “If we’d had our interest rate setting policy outside Europe, we would have had higher interest rates.”

Mr McCreevy said higher interest rates would have “lessened the impact” of the crash but “low interest rates gave the opportunity to Irish businesses [outside the construction sector] . . . to make a bob.”

Financial regulation

Mr McCreevy earlier told the inquiry that separating out financial regulation from the Central Bank of Ireland was not a “major factor” in the banking collapse.

“During my time as minister, it was never contemplated as to the remotest possibility that any Irish bank could fail,” he said.

The Financial Regulator was set up during Mr McCreevy’s time as minister for finance.

The former minister said that this was not a “Charlie McCreevy invention” as it was a structure used in other jurisdictions.

Mr McCreevy said that during the setting up of the Financial Regulator and during the transition phase between the bodies, he was strongly of the view that the level of cooperation between the new chair of the regulator and the governor of the Central Bank was “excellent”.

“Both individuals went to great lengths to smooth the integration process, which I understood to be very difficult given the range of matters to be decided and especially the staffing issues,” he said.

Stripping out financial regulation from the Central Bank has previously been cited by many commentators as one of the reasons for lax supervision of Irish banks and the failure to spot the increase in property concentration in the run-up to the financial crash in late 2008.

Mr McCreevy defended the policies pursued his time in government, and “would contend that the economy and public finances were in an exceptional healthy state when I ceased as minister for finance in September 2004”.

“There are many indicators for this period to justify this assertion,” he said.

“Spectacular economic growth; full employment; the ending of emigration after 150 years; rises in all levels of social expenditure; finance surpluses generated which led to a reduction in the debt/GDP ratio to 30 per cent approx, massive infrastructural spending, particularly on the road network; the setting up of the National Pensions Reserve Fund and many other indicators.”

‘Spurious’ arguments

Mr McCreevy said the arguments advanced concerning the Department of Finance lacking a sufficient number of specialist advisors were "spurious".

“One thing we were not short of was advice coming from all quarters,” he said.

“The views of all bodies and experts were always in the public domain, debated freely and conclusions drawn.

“On the question of reporting from statutory auditors of the banks, I cannot recall such matters ever being discussed in the department. This would have been regarded as a matter entirely for the regulator.”

The former minister said he always received “excellent advice” from the department officials.

“I found the finance officials very direct, scrupulously diligent and professional in their approach. No task was ever too great for them and they worked extremely long hours.”

Mr McCreevy noted that while he was in Government he was considered to be a “Scrooge” in terms of public spending, but since the financial crisis he has been painted as “Santa Claus” for the level of spending that took place on his watch.

He said he “spent the proceeds of the stellar economic growth in that period [1997-2004]” to make up for “lost time” and insufficient spending on public services in the previous 15 years.

Mr McCreevy noted that in spite of the “massive public capital programme” during his time as minister, the exchequer still managed to record a surplus each year.

Inquiry testimony

Earlier, the inquiry heard from second secretary general of the Department of Finance, Ann Nolan. Ms Nolan told the inquiry that nationalising Anglo Irish Bank did not stop the outflow of funds from the institution.

Former second secretary general Donal McNally gave evidence in the second hearing of the day; he told the inquiry there were lessons to be learned from the banking crisis and that he had been told the banking system was in for a “soft landing”.

The Committee of Investigation into the Banking Crisis, or the Oireachtas banking inquiry, was set up in November 2014 to investigate the political, economic, social, cultural, financial and behavioural reasons behind the banking crisis experienced by the State, as well as the preventative measures that have been put in place since.