Mr. Brian McEnery:

The £190 million identified by the Comptroller and Auditor General is the difference between the £1.49 billion figure and the £1.3 billion figure. In actual fact, we got £1.32 billion. That is how the £190 million was calculated, by virtue of the fact that the Comptroller and Auditor General has discounted the future value of the cash flows that both his office and NAMA agreed on at the end of December 2013. We both agreed on them and he signed off on the financial statement. We weread idemon that. What then happened was that we decided that 5.5% was not realistic. That was one factor.

Another factor we considered was the following. It should be noted that the 5.5% rate was in our paper. When NAMA acquired these loans from the participating institutions back in 2009, consideration was given to what was termed the long-term economic value uplift. What we deducted from that was a cost for enforcement or a carrying cost into the future for these loans. We took off a discount. There was an uplift, the long term economic value and then when we bought those loans, we applied a discount to reflect the fact that we would have enforcement costs. We also said in our paper of December 2013 that a purchaser would not buy these if there was not a discount and that explains the 10% that is referred to on the last page of that paper.

We approached it on a number of fronts to come to that £1.3 billion figure. It was not as if we came up with that willy-nilly. I know the Deputy is not suggesting that. We did not; we looked at it from a few different fronts. We looked at the cash flows and discounted them using a low, market-based figure. Remember, in the reports on the discount factors, some of which were given, there were ranges of between 11% and 19%, as the Department of Finance said back in -----