Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

The residential mortgage-backed securities and the commercial mortgage-backed securities, which the Deputy outlined, are defined in the amendments so that they are the only securitisation transactions undertaken by banks within the EU's capital requirement regulation. The use of section 110 vehicles for these transactions is simply the facilitation of the repackaging of the risk. In most structures, the interest income and income expense will be matched such that no profit participating note is required. The bank's retained risk will usually be structured as profit participating notes to ensure that it retains the correct exposure to the portfolio of loans which were securitised. It is not anticipated by the officials or Revenue that there will be any loss to the Exchequer by allowing this type of transaction to continue in section 110 companies.