Dr. Kieran McQuinn:

That is an interesting question and it almost warrants its own session. We have consistently talked about the issue in our economic commentary and it is not just mortgage interest rates but also interest rates for SMEs. The data clearly show that the average rates charged in the Irish market are typically higher than what prevails throughout Europe. There are a number of reasons for that, one of which relates to the lack of competition in the Irish market. The proposed exit of Ulster Bank from the market will, unfortunately, compound the difficulty of the relative lack of competition in the domestic market. The banks would claim that the reason they charge higher rates than those in other countries is that Irish banks have to carry higher levels of capital, which is a legacy of the financial crisis. There are a number of factors but the lack of competition in the domestic market is one of the major ones.