Mr. Stephen Bell:

I will take those three questions. We will postpone or write down non-mortgage debt to allow the customer to remain in his property to maximise what he can afford to allocate towards his mortgage. Along with all the other the banks in Ireland we have agreed with the general principle that unsecured debt should be de-prioritised to enable the customer to focus on mortgage payments. That has been agreed between all the principal banks due to appear before the committee as part of this session.

Reference was made to our view on write-offs not being helpful. We are not commenting on any particular institution but we believe that solutions must be effective. This remains a major issue and involves many thousands of customers. Spending too much time talking about solutions that can only really be applied to a small number of customers, numbering in the hundreds, does not really solve the problem. It is something of a distraction from the real issue, which is how we help the tens of thousands of customers who are still struggling to get back onto a level playing field.

There is a question for us around moral hazard. I have no wish to personalise this in any way, shape or form. Let us consider one example that received a reasonable amount of coverage in the press. Let us suppose the mortgage is written down to what happens to be the indexed value of the property today. We know that property prices will increase over time. We know property prices have increased in Dublin by 12% or 13% in the past 12 months. It is likely, therefore, that over the remaining term of the customer's mortgage the customer will receive a windfall gain at the gift of the State or the State and banks because the customer will have positive equity building up on a debt that was written down for no obvious reason.