Professor Patrick Honohan:

There are two reasons for that. The first is that the cost of funds is higher and the second is a lack of competition. There is insufficient competition in the market and we are already seeing the effects of that. AIB recently got a reduction and I hope that is the beginning of a trend. My perception is that the decision of RBS to stay in Ireland reflects the fact that it sees a market here that is not being constrained by rates being held down. It sees that there are good profits to be made. That will result in a convergence towards a better rate.