Mr. Bernard Sheridan:

The code focuses on how banks and lenders treat their customers. In terms of issuing the loan in the first place our priority is to make sure that the banks ensure the loan is affordable. That is a key point in the code. If people get into difficulty the code requires that the banks try to work with the borrower to ensure that an arrangement is put in place.

In terms of fair pricing, the committee is aware of our role in pricing. In the past there was a standard variable rate contract. The name gives it away as the rate was standard. In many ways the market was more transparent and simpler because new borrowers and existing borrowers would get the SVR and people could compare them more easily. As members will be aware, banks have moved away from an SVR by introducing lower rates to encourage borrowers to switch.

One of the reasons that we have introduced new measures in the code is because the market has become more complex. The lenders say they have made the lower rates that were available to new customers available to existing customers. However, the customer must take action to avail of the lower rates. Our new requirements impose an obligation on the lenders to inform the borrowers if there is a better product available and one that is better value for the borrower. I agree with the Deputy that the market has become more complex but that is one of the reasons we have introduced new measures.