Professor Patrick Honohan:

I want to make clear that I was not part of the discussions between the Minister and the banks. The Central Bank provided background information but we were not involved in the discussions. Some of the banks are offering a fixed rate for a few years. I do not think any of them offer a fixed rate for a 30-year mortgage, so it must be borne in mind that those rates would revert to whatever the standard variable rate is, probably at the end of the contract. One must look at each individual case. Sometimes, this would be an advantageous move for a borrower. For the banks to offer a contract like that, which is not a standard variable rate contract, one can see that they are not burdened by the back book in that case. They can decide that perhaps they could offer a reasonably good deal on a fixed-rate mortgage because they are not damaging their back book. That is why I am quite concerned about the transparency of the pricing on the SVRs. There might be some good deals out there for moving to a new type of contract, but I want to make sure and we will make sure that this is not done in such a way as to disadvantage SVR borrowers who may have very high loan-to-value ratios and are not in a position to switch their contract. We will see what they offer. I do not know what they are going to offer. I am not privy to their business plans in this area in detail.