Professor Patrick Honohan:

They are very interesting questions. I will start with the money one which the Deputy raised at the end. The Central Bank made a profit of €2.1 billion last year and it transferred 80% of that to the Government. It holds the rest in reserves. That €1.7 billion goes across to the Government. Some of it is treated as a capital gain, which is a new statistical approach from the CSO, so it goes towards reducing the Government's debt, not its deficit. It is of real benefit to the Irish people. A part of the profits is coming from the income on the portfolio of assets that the Central Bank is allowed to hold because it is part of the euro system and matches the currency issue.

Correspondingly, the Central Bank has investments, mainly in Government securities, mainly foreign but also some Irish. It receives interest on that and because the Central Bank is charged internally at the ECB's policy rate, the profit component of that is now very large.

That is part of our profit. Another very large part of it, however, comes from the fallout of the IBRC or Anglo Irish Bank liquidation. The Central Bank ended up holding Government promissory notes which in a complicated transaction were transformed into Government bonds with very long maturity. This ensured a stream of very large profits for a number of years at the Central Bank which can be accelerated and advanced, especially as interest rates are lower and the conditions for selling the bonds into the market are more favourable. This actually increases and accelerates the profits. Last year's profits were at record levels and this will continue to be the case for some time I expect. This is a significant claw-back indirectly through very complicated accounting arrangements of the Central Bank.