Mr. Oliver Gilvarry:

To take the framework we currently have, one has to look at the different steps. Given what has been brought in under CRD IV - the capital requirement directive IV - and some of the proposals here, some of which we do not agree with, as the Central Bank has outlined in regard to the macroprudential side and the limitations on the add-ons, we now have a framework whereby there is better quality capital and higher levels of capital. Even before we moved to that, however, there was a more intensive and more consistent engagement from the competent authorities with the entities in regard to looking at the business model to see what is the capital. Therefore, we have the higher level of capital and the better quality capital, and we then have the MREL concept which means that, if an entity is getting into difficulty, we start to bail in assets, which we did not see in our situation in 2008. We have the fund, which is one of the reasons the Department and the Minister have been very vocal in regard to the third pillar of banking union. We need to complete banking union so we do not have a situation where, if financial institutions get into difficulty, the link goes back to the Exchequer - to the sovereign. That is why it is so important to complete the work on EDIS but it is also quite important from a single resolution fund perspective that we have a common backstop and that we have full mutualisation as quickly as possible in order to eliminate any risk there is a call on the Exchequer in that event. Nonetheless, we have those other steps and those extra powers to ensure there is enough capital and enough instruments to be bailed in before we start moving towards the fund.

On the leverage ratio, I would agree with my colleagues from the Central Bank that the one thing that should be remembered is that the leverage ratio is there with the other instruments, so it is another indicator for the supervisor to decide there is an issue. We have the 3% for normal banks and potentially higher levels for the G-SIBs. From a European perspective, we have a very different model to the US. In particular, the US institutions do not hold the same level of mortgages on their balance sheets as we do because of what we call the Government-sponsored entitles, Fannie Mae and Freddie Mac. There is a much bigger securitisation market which is, in essence, state-sponsored and which we have in Europe. Therefore, the leverage ratio does not bite as much for them when compared to ourselves.