Professor Philip Lane:

Let me respond on two levels. I will first deal with the issue of the prevailing rate and then the wider issue of the mandate. On the issue of the prevailing rate, the Deputy should think about why we are here. We absolutely know we have two mandates. They are not ranked. The consumer protection mandate is as important as the financial stability mandate. I assure the Deputy that the making of the decision on the prevailing rate did not have any financial stability factor whatsoever. It was entirely based on what we believed we could stand over. As Ms Rowland stated earlier, it was based on whether we could challenge the interpretation we had on what was meant. It is not the case that the decision was driven by any other concern.

This is a whole-bank initiative. We have an excellent internal team of lawyers whose role is to work out what we can do within the legal framework we have. This has been such a body of work, especially driven by the people on the front line of consumer protection. The only reason these staff work for the Central Bank is to protect consumers. There is such a dedicated team, such that we have done everything we regard possible within the legal limits. As the Deputy said, this issue could well arise in a courtroom. Let us see what happens. We took the view, however, that this could not go further than where it went. This may go back to the question of what the famous phrase meant.

Let me come to the wider issue. This is ongoing. We have had this conversation repeatedly. I am absolutely clear that, irrespective of how much members may disagree with and criticise our consumer protection work, consumer protection would be at a lower level if it were run by a different agency. When we think about consumer protection, we are not thinking only about the individual in trouble with a particular mortgage. We also have to think about all the consumers who are paying at high interest rates on their mortgages and all future consumers who may be looking for loans. Let us say some of the legislation benefited a particular group. It would have to be assessed based on whether it leads to higher costs elsewhere or to the risk of the financial system going into distress. When the new Central Bank law was introduced in 2010, the first wave of comments, which I read in the Oireachtas debates, there was repeated commentary to the effect that consumers are not protect if there is financial instability. Therefore, in regard to the legislation in question, we place a lot of emphasis on the view that ultimately there is not really tension between consumer protection and financial stability. An unstable financial system does not protect consumers. That is our perspective. A separate consumer protection agency would not deliver in the same way as the Central Bank.