Mr. Cormac Butler:

One of the stated objectives of the ECB is that banks reduce non-performing loan portfolios but the only way to do that is to value them correctly. Once a non-performing loan is valued correctly, relative to the amount expected to be recouped from the customer, it ceases to be non-performing and becomes a proper loan. The Irish banks are saying that, because the loans are non-performing, they are forced to sell them to vulture funds. It does not make any economic sense to do that. Banks would be better off valuing loans correctly down to, say, €700 million and trying to recover that amount rather than selling it to the vulture fund for €500 million.