Mr. Valdis Dombrovskis:

As regards non-performing loans, it is also related to the Deputy's previous question. If banks held a high share of non-performing loans, it means they are suffering losses on those non-performing loans and that cost is passed to the customers. That results in, among other things, higher interest rates, which banks are charging Irish customers, and we see the same tendency in other countries with a high non-performing loans ratio. Ireland is not among the countries with the very highest level of non-performing loans. The three countries with the highest levels are Greece, Cyprus and Portugal, but in any case this is an issue.

I mentioned in my introductory remarks our non-performing loans action plan on which we are working for direction. The first is the prudential regulations as regards buffers. Banks need to build for non-performing loans and we will be coming forward with a proposal for new loans which may become non-performing.

The second is insolvency and loan enforcement frameworks where we are doing some benchmarking. We do not believe it is realistic to achieve a harmonisation in that regard because systems are very different and countries are very reluctant to change them. We are doing the benchmarking, therefore, which we can then address through the European semester to see what is working in insolvency systems, what is not working, what are the best practices and then, through country-specific recommendations, show the countries possibilities to address this problem.

The third is the secondary markets of non-performing loans. One problem is loan enforcement practices, which the Deputy mentioned. There have to be strong consumer safeguards in that regard and also consumer protection organisations which fight against aggressive practices. That is clearly not acceptable. From the point of view of financial stability, in terms of a spread between bid and ask prices, we see there is an information asymmetry that needs to be addressed if we want this market to be functional.

Fourth, I already mentioned the blueprint for national asset management companies. Ireland already has a national asset management company, which is working. Recently, the European Commission also found that the way it was set up is in line also with EU state aid rules. There had been some complaints so the European Commission had been assessing that and found it to be in compliance.

Those are the four work directions of non-performing loans. We will come forward with complete proposals on the European side on non-performing loans in the spring.