Mr. Richie Boucher:

I am sorry if I am taking too much time. This is an important point because it comes at the heart of the question from taxpayers, that is, whether Bank of Ireland has enough capital. That is our base case. An important part of our capital assessment is what we call the stress scenario - if things are a good deal worse than anyone envisages. We look at the stress scenarios applied by the Bank of England and the Federal Reserve. In particular, we looked at the stress scenarios evident in the prudential capital assessment review, PCAR, process for 2011. We used these for the assessment. The question is whether, even in a stress scenario, we would have sufficient capital. One of the things that is important to us in a stress scenario is the contingent capital instrument. This bails in, that is, converts to equity, at 8.25% if our ratios fall below 8.25%. In our stress scenario which looks at the quantum of difference between the profit in a stress scenario and a basic scenario used in the PCAR, we do not trigger it. I cannot ever say that, no matter what, we have enough capital, but based on the base case and our stress scenario we believe we are adequately capitalised.

The issue of the preference shares was raised and, again, it is important that we note it. The preference shares have a redemption step-up. The instrument is a perpetual instrument. When the preference shares were put in place in 2009, there was an incentive to redeem. Given that it is a perpetual instrument, it counts as capital on that basis and the coupon rate is 10.25%. Should the preference shares remain in the State's hands at the end of March, the redemption premium will trigger. However, at the end of March 2014 there will be no change to our capital and there is no payment due. The payment is due if and when we redeem. That is important from a capital assessment point of view.

We are working with the Government on the options available to us. I cannot talk about these options because during the past four years when we have come to the market, we have thought through the solution carefully and engaged with all the appropriate people. It is a capital instrument and, therefore, we need to discuss it with other relevant authorities. We are hoping we will come to the market as soon as we can but with a solution rather than our thoughts.