Mr. Cathal Sheridan:

Recovery planning takes place at a stage when the bank is not in serious trouble. If there is still hope and life in a bank that has got into a little difficulty, a recovery plan is put in place to try to ensure there is a plan of action to address that. The recovery plan is prepared for the bank itself. The resolution plan is prepared by the resolution authority, which goes in, looks at the bank and the obstacles to resolving its difficulties satisfactorily, gets the bank to address those obstacles and ultimately satisfies itself that the bank is alive and well and has put everything in place to ensure a worst-case scenario can be addressed if it arises. Senator Hayden also asked what we now know about the banks. The benefit of this comprehensive assessment is that we now have a much greater insight into the general health of the banks. Until now, part of the problem was that there were many banks about which people did not know very much. A great deal of upset was caused when various things started coming out all of a sudden. There was a lot of shock in the markets. Now that the ECB has done an analysis of the banks, it has a much greater understanding of them. The Senator is right to suggest that some banks have further work to do. The ECB now knows and understands the issues, whereas in the past many of the local supervisors did not have that type of information.