The chief executive of Irish Life & Permanent has described the sharp fall in Irish financial shares in recent months as a huge over-reaction.
Speaking to the Leinster Society of Chartered Accountants today, Mr Denis Casey said the markets would, in time, recognise the underlying resilience of the Irish economy and its financial institutions.
Denis Casey chief executive of Irish Life & Permanent
He said Irish banks had been "treated savagely" by equity markets during 2007.
Mr Casey was cautiously positive about the prospects for the Irish economy.
"Ireland's macro economic position is fundamentally sound. A low level of public debt, low taxes and low unemployment mean that we have the cushions to accommodate a more challenging environment," he said.
Mr added that he expects the ECB to lower interest rates by 50 basis points (half a percentage point) this year. "With US and UK interest rates falling, the weakness of the dollar will soon impact on the major exporting Eurozone businesses and could threaten the emerging economic recovery in Europe's engine room," he said.
Commenting on the housing market, he said the reduction in house prices and housing output in Ireland was a sign of a market working effectively.
"As demand softens, prices should respond and supply should reduce. And this is exactly what is happening....it means that house prices have a real prospect of stabilising sooner rather than later."