Mr. Donal Forde:

We sort of mentioned this previously, maybe ... my ... I wouldn't have had any direct engagement with the regulator here but my understanding was this, we were in breach of the limits ... we were in breach of a limit that set out a singular constraint on the totality of all property and construction lending. That had been in place for a long time. What was going on in prudential circles at the time, and there is reference to it here in the paragraph just before that, what was going on at the time, was the introduction of Basel II conventions to analyse, and these were new protocols that were being introduced for the assessment of risk attaching to loans, and the thrust of those was not to look on loans as one homogeneous set, but to break them into what were called logical portfolios and to look at the particular risk attributes that are attached to each of them. My understanding is that the regulator was also of the view that that's where they needed to go and for that reason that the old limit was somewhat ... somewhat redundant and were in conversation with AIB saying, "How are you doing this, and actually how are you getting comfort with the scale of your exposure and is the board comfortable with it?" And then, as part of that presentation, AIB set out how it went about assessing its portfolio in this new way under this new methodology and the board, it seems, took comfort with that and is saying, okay well, let's then make it clear in our engagement with the regulator, let's have this new formula adopted but let's not have this indecision as to what particular standard of measurement is to apply. That is my understanding of what was going on but I was not directly in discussion with them.