Professor Patrick Honohan:

The Deputy has asked a very interesting question with a number of dimensions. We have not allowed the banks to assume - although I do not believe they were minded to do so - that house prices backing mortgaged properties are still worth what they were when the mortgages were issued. We have provided capital and made an allowance for a very substantial fall from peak to trough in residential property prices.

When we conducted the capital adequacy exercise, that required the banks to be recapitalised in 2011, we made provision in the stress case of a peak to trough fall in house prices of 59%. That is not applied loan by loan to an assessment of what can be recovered because many loans for houses that are in negative equity are being and will continue to be fully serviced. When the Revenue Commissioners make an evaluation for property purposes they will not necessarily map across in any direct way to provide new information that would surprise or alter our view as to the amount of capital needed by the banks. I do not see a map across but of course the Revenue Commissioners will no doubt rely in large part on the same information that is already in the public arena from the CSO in producing average property prices. They will map it on an individual basis.