Kieran O'Donnell (Limerick City, Fine Gael) | Oireachtas source

I presume that situation would be classified as a risky loan on the balance sheet of Ulster Bank beforehand. At the moment this matter has cropped up as an issue across the mortgage loan book. I would use the term "paradox of positive equity" whereby people in positive equity are at times more vulnerable than people in negative equity. I do not mean they are vulnerable in terms of their homes. There is commonality because they are vulnerable at the time of bank repossession and assisted voluntary sales.

I will explain the situation. The banks have issues in terms of their capital ratio requirements, provisions, stress tests, etc. What happens if a bank has a loan that is in arrears for more than 90 days and climbing? Obviously it will be classified on a risk weighted basis within the institution. Let us consider what happens if the asset is realised and the loan has gone off the bank's books. Am I correct to say that scenario will improve the capital ratio requirement of the individual institution?