Mr. John Trethowan:

When the targets were set we did not know how the system operated. We did not have a feel for the sanctioning activity of the banks. We have had monthly activity reports for the past four years and we know when to expect lending to happen, which is generally quarter four. The monthly figures we receive are put on charts and compared to the previous years and we have a feel for where we will end up this year. If we felt it was going backwards we would meet the banks immediately. The targets served a purpose when we did not know what was happening next but now we have a good feel for what to expect. I believe the targets became superfluous. With regard to ducks and drakes, in 2010 and probably 2011 some of the activity was in refinancing, but it was still viable as if the refinancing had not taken place many enterprises would have gone out of business.

A lot of businesses were put out of business at that time. Over the last couple of years the Central Bank has been asking the banks to tidy up their legacy book. That is an exercise which has been gone through and has been reported to the committee. It is now either new lending or it could be refinancing as well but because refinancing is so important to so many businesses I think it is valid to have it included there as well.