Mr. John Moran:

On the question of competition in banking, what I tried to convey in my opening statement, perhaps not clearly enough, is that there has been a great deal of discussion on whether or not we should have two, three, four or some other number of banks. The point I was trying to make is that we are of the view that people should look first at the size of funding that is going into the economy. I do not know what the exact percentage will end up being but, for example, if we move to a scenario in which 50% of the funding of the economy comes from banks and 50% comes from non-banks, then, by definition, even if we only have three or four banks, they are only comprising half of the funding source. We need to take account in doing the calculation of how many participants are funding the economy of those parties who are playing on the other side. We plan to use the Ireland Strategic Investment Fund and the strategic investment bank to allow more funders to come into the market, not necessarily as banks but as participants who can facilitate an increase in competition. We are concerned about ensuring there are enough providers of funding in the system, but the analysis of the issue is a little more complex than it might appear.

The other important aspect to consider in regard to competition is that we are moving into a world of banking union, where a European regulator will, in effect, be regulating all of the banks across Europe. The Deputy is correct in observing that at the beginning of the crisis what we saw was a nationalisation of banking systems, where national regulators were reluctant to allow their banks to participate in lending activities in other jurisdictions, especially where domestic deposits were concerned. A well-functioning banking union should allow us to reverse the worst impacts of those developments and get back to a situation in which European banks are participating in activities across the Union, and the eurozone in particular. We see a perfectly plausible scenario developing where we stop talking about banks as French, Italian or whatever, because they have become European banks in the same way that we think of United States banks. It is a lot easier to imagine in such a scenario that we would see a return of European banks into the Irish economy, particularly if our economy is growing.