Mr. Cormac Butler:

I cannot say that is definitely the case because the rules in respect of non-performing loans have changed quite a lot. If a loan is given to someone whose salary is €100,000 but that person's salary suddenly decreases to €30,000, the lender will clearly be unable to recover that loan. The lender then has to ask what is the maximum loan it would give to that person today and to write down the loan by an amount equal to the difference. The loan then becomes a performing loan. Under its definitions the EBA might say that this customer defaulted because he or she did not meet the conditions of the original terms sheet. It could therefore be an NPL by definition. The EBA definition, however, should not come into play. We in Ireland should classify loans as non-performing if the full amount cannot be recovered and such loans should therefore be valued down. If the full amount can be recovered, the loan should be left alone. It should be that simple. Getting into EBA definitions would create more confusion than is necessary.