Mr. Oliver Gilvarry:

On the point Deputy Pearse Doherty made on the banking side, if one puts one's money on deposit in a bank, capital requirements apply. The capital requirements apply in order that if the loans or investments made by the bank are bad, there is a buffer in place to prevent depositors from losing out. On top of this, one has deposit guarantee schemes. As Mr. Carrigan outlined, money market funds are for professional investors. With the 3% buffer, one is not taking into account whether money is invested in high quality, short-dated sovereign debt.

An example would be if one were investing in German government paper, which has a three-month maturity, or in what people would call peripheral debt within Europe, which would be seen by the markets as higher risk and which would give a higher return. From a banking perspective, if banks are involved in riskier loans, the capital requirements under CRD IV and the CRR would require a greater buffer because of the risk involved. This could mean that a money market fund that is facing some pressure on its buffer would take greater risks to try to make greater returns than the fund so that it does not have to replenish the buffer from its own resources, because it is no different from investing in very high-quality safe assets and maybe taking a risk to try to get that extra return. From a banking side, one is looking at different risk ratings based on the riskiness of the asset, whereas for this 3% buffer, it is much more of a blunt tool and does not take those risks into account.