Mr. Bernard Byrne:

As we go through each grouping and cohort, we look at the root cause of each. We have considered what the causes were and how they arose. Our overall assessment is that the world changed very dramatically as a result of the financial crisis in 2008. AIB reacted as the whole banking system reacted by suspending the tracker product very quickly as ECB rates collapsed and the ability to use it as a funding source disappeared. People did not think through the consequences of the suspension of the rate environment around the tracker position at that point with regard to new customers getting that rate. Existing customers who had tracker mortgages obviously continued forward. The consequences of all of these contracts and contractual positions and effectively marketed positions were not tracked on systems. As each of these issues arose, we ended up with over 40 different types of customers, some of which would be very small events while others would be larger.

It is a complete failure of the administrative system to track the complex products on it at the time. The withdrawal of the offering at that point was not properly thought through with regard to consequences of associated tracker issues. We are not surprised, when one looks at it, that everyone did it around the same time. It was as a result of what happened in the marketplace with ECB rates disconnecting completely from market rates. We are not surprised that occurred across the system. Everyone had their own challenges with regard to how they implemented that and clearly most people got it wrong with regard to the follow-on consequences for other customers.