Professor Philip Lane:

I will turn to Ms Rowland in a moment about some of the ways consumer protection is involved in some of the issues the Deputy raised. To come back to the reality here, what we are seeing is a mix of risk premia and a lack of competition. When reference is made to other countries, which have ceilings and caps, it is not the case that it is at the fine-tuning element of 100 or 150 basis points.

It is through really high interest rates, way above what we are seeing here. It is not the case that we or anyone else can draw the line between saying this is what is reasonable on a risk premium basis and no more than that. By their nature, laws are hard to undo. If there is a law which pitches it at the wrong level, there is a serious barrier to entry. That is the problem in trying to find a legislative solution. The other approach about which we have talked is promoting entry, keeping barriers to it low, keeping the system stable to reduce risk premia and then watching as entry or the threat of it does its work. That is the way I see it going. We do a lot of work on some of the particular issues related to switching, front book, back book, cashback and so on. Ms Rowland can elaborate on the matter.