Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

Obviously, the difference is that when Goodbody was owned by Fexco, it was completely private. Today, it is owned by majority by Irish taxpayers. Therefore, you cannot argue that the same remuneration applies in the private sector as is potentially in the public sector at all times.

I want to talk to Dr. Hunt more about looking into the future in capital requirements.

The return on equity expected by shareholders is approximately 9% or 10%. Before the financial crash, it was 15% to 20%. Obviously, the capital requirements applied by the ECB are having an impact on the banking sector. It would be argued by AIB and others that these are contributing to high interest rates, a low return on equity and, hence, a limited appetite for investment and new entrants.

The rate of risk-weighted assets, which are a measure of risk and influence the capital that must be held against a mortgage like any other loan, is high in Ireland compared with other European countries. This means that additional capital must be held against mortgages in Ireland. The rate in Ireland is a multiple of what would be found in, for example, the Netherlands and Germany. The calculation of risk-weighted assets is influenced not only by future risk, but by a look-back provision. I am looking at the Department of Finance's report, according to which Ireland's rate is approximately 37% whereas Britain's is in or around 11% or 12%. AIB has an average of 30% risk-weighted assets. What can be done to bring that number down closer to the European average? Is it the case that there needs to be more transparency in how these rates are calculated at ECB level? Is there anything that AIB can do itself? If we were to reduce our average to closer to the European average, what impact would it have on interest rates?