Dr. Kieran McQuinn:

It is a good point. Even in recent days there has been a significant amount of commentary on it and speculation that a default is imminent. From what one can gather, obviously there is the issue of the International Financial Services Centre, IFSC, exposure. However, I do not think it poses a systemic financial stability risk to the Irish financial sector in general terms if some of those bodies were to default. In terms of a broader default by the Russian state itself, these things can be difficult to assess. We do not fully know what the knock-on implications may be. Outside the IFSC issue, I do not think we have any particular exposure in terms of Russian finance generally as far as our financial sector is concerned, but clearly there would be an impact in terms of, for instance, risk premiums generally and the setting of interest rates. That would have a knock-on effect on interbank interest rates and possibly on interest rates at the household and firm level. If there is a major international episode such as a default, especially by a sizeable economy such as the Russian one, it would have knock-on effects. The one channel that would affect straight away would be through the risk premiums channel and that would lead to an increase in interest rates charged throughout the financial system, whether interbank rates or possibly rates that are set in terms of households and firms. That is the one channel where I would see that occurring. I do not know whether Dr. O'Toole agrees or has anything to add.