Mr. David Duffy:

Deputy Twomey's first question was whether, given the scale of what we have to achieve, it is premature to talk about attracting investors. To be explicit on this point, there will be no investors really soon. What we are saying is that investors look at the evolution of a bank, and some might wish to come in earlier in that evolution where they see the price of entry being cheaper and the potential for profiting as things improve. Other investors might choose to become involved at a later stage. We are not targeting investors for a price but rather for trust and confidence. Our view is that it is never too early to start building trust and credibility with all classes of investors. We do not have to accept anybody's offer at any time. It is not a matter of rushing to sell; it is about the Government making the decision on price and us preparing the ground as well and as thoroughly as we can in anticipation of investors of all types possibly engaging in a debate. It is a question of balance. We are seeking to build the credibility necessary to create that option and it is then at our discretion, collectively with the Government, as to when the choice is taken to exercise that option. That is the nature of what we are trying to do. We recognise fully the many challenges we are facing in this regard. However, many investors are not put off by the severity of the challenges facing the world of banking. In fact, many are of the view that Ireland as an economy and the bank as a link to the sovereign are among the first to emerge out of the chaos of recent years. That possibly makes us an attractive investment prospect and we will do whatever we can do to encourage people to think about us in that way. Timing and price, however, are a Government issue and we will not seek to influence that.

On the question of whether there is a reluctance to consider debt forgiveness, it is important, first, to ensure that we are all talking about the same thing when we have this discussion. In particular, it is important to recognise the difference between debt forgiveness and debt restructuring, which includes write-offs. The phrase "debt forgiveness" suggests to us the notion that debt can somehow be magically waived. However, the moral hazard and the absolute inequity of those types of decisions places one on very dangerous territory given the reality that lots of people are paying their debts. The question would immediately arise as to why one person's obligations should be waived simply because he or she made a bad decision which another person, who is not receiving any benefit, did not. When we say that debt forgiveness is not a policy we are supportive of, that is the reason. Blanket forgiveness without regard to the moral hazard and inequity of unbalanced dealings with different people in different situations is not a solution that works. What we are saying is that we are working on the principle of affordability, as Mr. Murphy mentioned. We seek to address, on an individual basis, what is sustainable debt and what people can afford within the mix. In such circumstances, the bank does look at write-offs of debt. That is the approach we are taking rather than simply blanket forgiveness.

The third issue the Deputy raised related to the difficulty in securing loans. There is an evolution going on here and our primary obligation in this is education. We have to get out in the marketplace, which is why we are doing what we are doing. For example, we are saying to members of the committee that if a person approaches them with a problem, they should pass the details on and we will try to assist. We have engaged with local radio, arranged meetings in town halls and so on in an effort to get our message out. It is a matter of putting feet on the ground throughout the country in order to identify where problems are arising. In recent months I have seen thousands of SME owners, including 30 CEOs in one go. I have seen SME owners in large groupings and I have seen individual customers. On each occasion I put some very simple questions to those sitting in front of me. When I asked, for instance, who in the room wanted more debt, no hands were raised. On the other hand, when I asked who was seeking restructuring or equity, a lot of hands went up. The reality is that there are pockets of the economy that are doing very well, including the agri sector and others, where there is a requirement for more debt. We must, however, be very careful and responsible about pushing more debt onto those who are already too heavily indebted and who should instead be offered other solutions. We are seeing a low-demand domestic economy. In our view, there is a need for equity, as well as restructuring, in that low-demand economy to balance out the absolute burden of debt.

Would Deputy Twomey like my colleague, Mr. Byrne, to expand on this last issue or does he wish to ask another question?