Professor Philip Lane:

Over time, and it is a major responsibility on us, we must deliver a more stable credit cycle whereby it accumulates year by year that the number of new defaults is low. This will be based on having a more stable economy and ensuring mortgages are safer, by requiring bigger deposits, and more affordable, by specifying multiples of income. The most recent data is the most important in any of these models. Year by year, the situation will improve.

As the Deputy said, there may be particular segments in which switching is more difficult and these are the cases which are most open to questions of fairness. The broad scope of the market will largely reflect those fundamentals. If there is a major crash in the market, loan to value ratios will suddenly become high. While it is tempting to make cross-country comparisons, as Mr. Sibley explained before, the way mortgages are priced in different countries varies. There may or may not be insurance, up-front fees and so on. While there are anomalies, the range of what we see here, by and large, reflects the reality of the situation.