Mr. Peter Roebben:

I am sorry - I did not mean to interrupt the Senator. Yes, I am aware of the Irish division. I do not think this is unique to Ireland. What happened in Ireland of course went much further and much deeper than what happened in other countries in Europe and where KBC is active. What happened here was therefore very much on the group's radar and we discussed it. To give the Senator some context, we held last year a two-day session with the entire top 300 of management in KBC Group to discuss the issue of culture and the topic of responsible behaviour and how to bring it into the group's work. The special experience of what happened here in Ireland was on the agenda very explicitly as an example of things that should not be allowed to happen and can never happen again.

Let us talk about KBC Bank Ireland and KBC Group. Regarding risk management, oversight and governance internally, there has been a sea change between what happens now in our institution and what would have happened ten or 12 years ago. Structurally, a whole lot of measures have been taken to ensure better and more independent control. There is a totally independent CRO, three lines of defence and so forth. This is obvious now but that was not the case looking back ten or 15 years ago, when I could go through a whole technical list of governance issues. There is also a totally different regulatory environment now with a lot of interventions that provide some needed checks and balances on the banking market. The third component is the more difficult but also the more fundamental one: how one gets well-balanced behaviour in organisations. This is about making sure that the output-versus-outcome trade-off is constantly being made. On the one hand we must carry out cost-benefit analyses in generating return on economic capital but, on the other, we must be aware that every decision has an impact on clients. Basically, the question is whether a decision enhances the well-being of the client. Is there a fair balance in how costs and benefits are shared between the bank and the customer? Ultimately, are the decisions we make scalable? Something that might be a good idea in the short term could turn out to be a very bad one in the long term. Something that might work very well for a particular type of customer could backfire badly if one were to start expanding it across the market. The trick is to find a way to have that dialogue going on constantly at every level in the organisation. This is a journey that has only just begun. If one could fit this into a big rule book and go to page 25 and find the answer to a given question, it might be easy. The reality is that life is very complex and opinions can differ as to what the right balance is. At the core, this is about getting a dialogue going in an organisation and keeping it going at all levels, not only top down and bottom up, but also horizontally, peer to peer, and creating internally a culture of transparency whereby these doubts can be put on the table such that people can ask, "Should we do this? Should we make this decision on this product?" I could give examples from elsewhere in the group where one must carry out this management of dilemmas, because that is what it is. It is part of the normal way of doing business. Some things are very simple; we know we do not have to do them. We of course do not do things that are forbidden by law. Day to day, however, all of us are involved in decisions that incrementally can lead us on a wrong path. The Senator asked me where we are. We are at the beginning of the journey, and it will never stop. It is a continuous journey.