Mr. Seán Murphy:

In terms of competition, that is one of the big challenges. This is a personal view but retail banking will have to be treated as a strategic utility in the future. A strategic utility has different types of growth rates expected of it and regulated for it. Given that we have a population of 4.5 million people, there is not a huge amount of room for a whole lot of players in that area. I note that even in the mobile phone market, despite the best efforts of the regulator to drive competition, ultimately, we are rapidly moving towards three families of mobile phone companies in Ireland. That type of thing happens with such networks. It is more important to have a regulatory environment that ensures best practice and fair practice for all consumers rather than necessarily chasing extreme competition or multiple competition. Part of our challenge in the downtime was things like the 100% mortgage and everything else that kicked in in the mid-2000s that drove other more conservative banks to chase the market and we ended up having to pay for it in significant amounts in latter years. Clearly, the case for additional enterprise-specific skills and enterprise-specific loan skills is quite compelling. As a network we have not come down officially on a perspective on it but the ICC was a worthwhile institution that did good stuff when it was in situand merits review again. We have three significant players and some niche players left in the market.

We do not have the level of diversity and competition we had ten years ago. If one takes the view that deposit-taking banking is a strategic utility, one might feel that the current number is a more credible number to have.

I think I have answered the question about new forms of banking such as angel investing. Regarding the low appeals ratio, I think part of the issue is that seven years into the downturn, there has been a huge throughput of businesses that have hit the wall, unfortunately, and gone bust. The businesses that are still alive are alive for a reason, which is that they have the guile, the product and the customers to keep them alive. I am sure they have relationships with banks that involve some forbearance.

The Deputy also asked about appeals to the Credit Review Office. Many of those involved in SMEs know they are running good businesses, but they have bad balance sheets because of previous property investments they made. They now have to choose between going bust and grinding it out. The businesses to which I refer are in grind-it-out mode. The real challenge will be presented in the next 18 to 30 months if businesses that need investment capital to help them to grow and sustain themselves are still encumbered with significant asset debt from their investments in the early or late 2000s.

The issues I have mentioned are driving the relatively low levels or ratios of appeals. Many businesses know they need to fix and grind down the challenges in their own balance sheets. We are seven years into the downturn, thankfully. It is to be hoped that many of the businesses with which we have interacted are still here. If they are, they will have seven more years of their loans paid off, just like households that are paying off mortgages. I think that is probably the big driver in this regard.

I do not suggest that the Credit Review Office has not played an important role. It has played an important role in terms of being there as an appeals facility. It is important to be able to avail of the services of a referee if necessary. However, it could be fixing solutions earlier in the process. I do not say that to criticise the Credit Review Office for the low level of take-up. I do not believe there is a fear of appealing from the perspective of businesses. That is my personal view. I refer the committee to the issues I mentioned earlier.

I cannot put a price on the quantification of late payments right now. It is more a question of the principle being established. To be fair to the central government Departments, they have speeded up their payment times significantly. We are saying that it is a question of making sure their sub-entities do the same. There is no better way to get that process going than to impose a cost penalty on those who do not get the cheque out the door or, more helpfully, make an electronic payment.