Mr. John Palmer:

The message we have been giving to the Banking and Payments Federation of Ireland, BPFI, and indeed to the banks relates to how this was handled and other jurisdictions. The UK is a good example, but Sweden and the Netherlands have a similar thing. The banks there work together. In the UK they are all part of a payment system, which is called LINK. LINK is the entity that will handle all of these issues for them. Unfortunately, there is no similar arrangement here at present, but we want to create the space for that to be a possibility. When the bank makes the determination that there is a breach of the criteria or indeed that there is a local deficiency, it will make a notification to all three banks. It will give them details of the breach or the local deficiency. Then, under the heads, they will have a month to come back and make proposals. They will also have the ability to consult with the Central Bank in that period. If none of the banks come back and make a proposal about how to fix it, or if the Central Bank decides that the proposals that have been made will not fix the problem, it will have to move on to the next stage, which is to issue a draft direction.

Draft directions have to be made specifically to individual designated entities. That would be a difficult job for the Central Bank to do in the example that the Deputy gave. We are setting out things that the Central Bank will have to have regard to when it is doing that, the first of which is the cause of the breach. If that can be attributed, it would obviously be a relevant factor. One example of the cause of the breach may be that a bank may close its bank branches in a region.