Mr. Ed Sibley:

Conditions are improving in the mortgage market. The health of the banks is improving but there is still a degree of fragility as in the mortgage market and there is a degree of vulnerability in the banks as well. They are not in rude health. They are certainly much stronger and more resilient than they were. There is evidence that there is strong momentum to address mortgage arrears and bring their levels down. They will continue to fall, absent any significant shock which we hope will not happen. I would envisage that trend continuing and I hope differentiation and competition in the market will continue to improve. There is potential for new entrants and perhaps they could be encouraged by some of the underlying factors we talked about being further addressed.

In terms of the capacity of the banks to fund the 25,000 homes, or whatever the number might be in reality, we are working on that. It is not just a question of mortgage lending but of where the funding comes from for the developers. There are many difficulties in the housing market which go well beyond the Central Bank's responsibility. Many of those need to be considered.