Oireachtas Joint and Select Committees

Thursday, 5 February 2015

Committee of Inquiry into the Banking Crisis

Context Phase

Mr. Mario Nava:

There are no global standards to limit the growth of the banks. There is, however, a global standard that was asked before on the indebtedness of the bank - on the leverage of the bank. That is a static value; it is not a dynamic value. So there are no global standards or European standards to limit the growth but, having said all of that, it is exactly the job of the supervisors to understand what is driving the growth of a particular bank.

The situation the Deputy describes is a situation that is more, let us say, idiosyncratic - so referring more to a particular bank than a general situation. It is typically the job of the supervisor to look at one particular bank. In the case of that bank, if it observes a growth rate which may be due to the effect of having found a particularly good business sector or a growth rate which can probably not be sustained, that is the duty of the supervisor. There is no global idea for that cap.

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