Professor Alan Barrett:

Can I make a quick intervention on the banking issue? Ordinarily, when asking a bunch of economists whether they are worried about something like this, they will talk about competition in the marketplace. An interest rate is just another price and, in the same way as we do not worry about price of bread, we think competition will sort it out. However, the tricky issue here is that the exit of foreign banks means competition has been removed from the Irish market. When economists talk about these things, they are reluctant to intervene through regulatory mechanisms on the assumption that competition should look after it but it is not clear there will be a strong competitive element in the Irish banking system for quite a while. It is an issue we must keep an eye on and economists will have a more nuanced view of it. I am sorry Senator Barrett missed my intervention, my communistic remarks on banking.