Oireachtas Joint and Select Committees

Thursday, 7 May 2015

Committee of Inquiry into the Banking Crisis

Nexus Phase

Photo of John Paul PhelanJohn Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

Okay. Specifically on the matter of sectoral limits, yesterday Mr. McCarthy, in his earlier evidence, said ... stated, and I quote, that: "There was a sense that the sectoral limit was honoured more in the breach than in the observance". Subsequently when I asked him specifically about the matter, he said that Ulster Bank had never breached the 250% limit as it previously existed, and we've had evidence from Mr. Gleeson, in particular, former chairman of AIB, where he referred ... referenced the sectoral limits, and he said directly: "We would have been very well off not to have exceeded the sectoral limit. It's a great shame that we didn't". And he's viewed the sectoral limit as a guideline more than an actual firm limit. So I want to ask you, in relation to Mr. McCarthy's evidence yesterday, firstly, he said it was observed more in the breach than in the observance, and, secondly, he said that Ulster Bank had never breached it,. Did Ulster Bank breach the sectoral limit, did it come anywhere near breaching the sectoral limit? If it didn't, why was there ... why was the limit increased to 500%, and why was that sought by Ulster Bank? And, furthermore, what was your own attitude, and the attitude of the bank to the limits in question? Did you see them, as Mr. Gleeson saw them, as guidelines, or did you see them, as Mr. McCarthy referenced them yesterday, as firm restrictions on lending into particular sectors?

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