Mr. Ed Sibley:

It is an element of an answer to the question the Senator raised, which is a much broader and more political point around the wider level of deferred tax assets in the system. From a financial services perspective and particularly from a bank's perspective we are looking through them now. When we think about the level of capital a bank has we look at what is termed a fully loaded basis, which is stripping out those elements, including deferred tax assets that are being phased out, as something one could recognise as a strength from a capital perspective. When looking at the strength of the banks' balance sheets and their capital positions we look beyond deferred tax assets. In effect, from ours and a market perspective, the banks do not get credit for them because we are looking through them. They are being phased out in terms of their treatment under the capital regime. That is a different issue from the one the Senator raised, which is about what should happen with the profits that are being generated now by firms that had losses in the past and can offset those losses against future profits. That is very much a tax and political question and I cannot give an opinion on that from the Central Bank's perspective.