Mr. Paul Dobey:

And it's hard to give this example in relation to a property, but I'll give it in relation to a business or a company, right? So, if a company is ... has borrowed from the bank and it is trading fine for a while and then it loses its biggest customer, right, the event ... that ... and the cash flows dry up, the event that drives a loss for the bank is that ... the loss is that customer, right? So, if the company has, for example, cash on its books and it can continue to pay interest and principal, it may take six months for it ... not ... it to default on the loan. That's IBNR and what you've got to work out, in IFRS terms, is what is the period in which losses have been incurred but not reported and over what period do they emerge.

The other thing that's set out in IFRS, and again this is ... IFRS is pretty complicated in this matter ... is if you have ... IFRS asks you to look at historic loss rates in relation to your IBNR, but if you know you're in a more difficult environment now than the history reflects, you're allowed to take account of an adjustment factor. We, and it's in our detailed communications with the audit committee that ... or with the committee, we had a huge debate with AIB in relation to this matter in 2008. As we talked earlier about the paper we did on 3 November which dealt with the specific provisions and we were ... we would have ... we were encouraging AIB to take more IBNR and actually, when they got towards the end of the audit, they did take IBNR, a significant IBNR to deal with that downside risk.