Professor Philip Lane:

This goes back to funding and what my colleague explained to the committee before. Much of what lies behind the high rates in Ireland is that the Irish banks have significant funding costs. The history of losses is such that significant risk premia have to be charged. The fact the Irish market is now quite concentrated means that there may well be a margin associated with essentially market power in that they have the ability to levy rates more than they would if there was more competition in the market. We would all welcome more competition in the market.