Mr. Ed Sibley:

I will come to the specific question but, as I did earlier, I will provide some background. We operate as part of a European system of banking supervision. Setting capital levels for banks, which are what are called significant institutions and include the main Irish retail banks, takes place within the Single Supervisory Mechanism. We, as part of that mechanism, with the ECB and the other competent authorities across the eurozone, make the determination as to the appropriate level of capital to be held within any bank that is deemed significant. We have an important and active role to play in terms of the execution of the work, the methodologies that are used and the final decision making process. Every year we complete our risk assessment taking into account the issues the banks face today as well as on a forward-looking basis. We consider what are reasonably plausible stress scenarios. We would expect the banks to be undertaking their own capital planning, including stress testing, as well. We use that to set up minimum capital requirements for banks to hold.

We also issue capital guidance which we expect them to hold over and above the hard requirement. In theory, the banks have some degree of choice as to whether they hold it but in practice they are all above it. Typically, capital requirements are set towards the end of the year. We are coming to the very end of that process now and are setting capital requirements for all of the Irish retail banks. These will take in all our considerations as to the risks they face on a forward-looking basis, whether it is Brexit-related, the conduct risk that we have thought about or other factors. That sets a minimum capital requirement. We have a small buffer on top as guidance. In reality, we expect the banks to hold a bit more above that. We do not like to see banks that are just on the surface or with very little margin between the regulator requirements and the requirements they hold. That will capture the Brexit risk.