Mr. John Moran:

Sometimes, people can have difficulty understanding why we are pursuing an austerity programme, trying to reduce deficits and getting the national economy back into shape.

The reason is it impacts on the ground via these mechanisms of the banks and semi-State bodies in terms of the cost of funds. One must do the maximum one can in this regard, which then flows into everybody's pocket through the rates charged by banks and so on. Approximately one third of all mortgages are at the standard variable rate, which is a significant proportion of the mortgage population. The Deputy is correct that an historical book of tracker mortgages in the banks includes people who negotiated or were given good deals in the past and that new pricing models for mortgages must be on a more rational basis. It is important to remember that while mortgage arrears are a significant part of the problem, about which we are concerned and which we want to solve, more than 85% of people are paying their mortgages. To the extent that they are taxpayers and the banks are not able to operate profitably, we would be facing the spectre of new capital needs for the banks into the future. From the perspective of the Department, relationship frameworks have been put in place and management has been given the ability to set commercial rates on a commercial basis and will continue to do so.