Mr. Ed Sibley:

It has been an ongoing cause of interaction with the banks since the financial crisis as to whether they have enough capital, whether they are recognising problem loans in the right way - I appreciate this is a different matter but the same principle would apply - and whether they are provisioning appropriately for losses associated with those issues? There is a huge amount of judgment within the framework and the accounting rules. They are changing to try to address some of the issues that were evident from the crisis but the interaction is ongoing. We do credit inspections to ensure that loan books are adequately provided for. We carry out ongoing analytical reviews. We are never absolutely satisfied that they have 100% the right number because there is a lot of judgment involved. On a broad basis, we are satisfied that the banks are adequately recognising where they have problem loans and, broadly speaking, they have sufficient provisions to cover those loans.

It continues to be one of our key priorities where there may be an incentive for the banks perhaps to be less prudent because it impacts on their profitability. We are continually pushing to make sure that provision levels are prudent and appropriate. We do that every year. As long as non-performing loans remain high in the system it will be a continuing activity for us in the foreseeable future.