Mr. John Moran:

I will make a couple of important points. We referred to the relationship frameworks, our level of engagement with the banks and the importance of their operating as commercial entities with a view to moving to profitability. The most important influence that we can have on the rates that banks charge their customers is at a level above the banks, in that we should do what we can to reduce the cost of the State's borrowing. This would feed into the banks' ability to borrow money more cheaply. On page 37 of the annual review document that we produced this morning, there is a clear illustration of the correlation between the cost of funds for banks and the cost of funds for the State. The more one reduces the cost of funding the State, the more one reduces the expenses side of the banks' balance sheets.

It is clear that the banks must manage themselves on the basis of profitability. The State should not interfere in that regard. For example, we should not dictate what maximum interest rate they should charge on mortgages or what minimum interest rate they should pay on deposits. They also need to be able to compete with one another.