Mr. Larry Broderick:

There are a number of points there. There is a huge amount of regulation coming from Frankfurt, which is focusing on enhancing capital in the banks. The banks' strategy is very much geared towards addressing capital issues at the expense of everything else. Going back to our idea of the forum, we need to challenge Frankfurt. Do we have to capitalise ourself to the extent that short-term decisions are made to maximise capital which impacts on customer services and creates short-term changes in the industry?

That is the Frankfurt perspective.

With regard to probity and regulation generally, there is a considerable amount of regulation in the industry. It could be argued it is over-regulated. I do not believe one can ever over-regulate but there is a great deal of paper regulation. The core of the question concerns whether the regulation is fit for purpose. We believe there needs to be proper testing and evaluation in this regard. In the area of grandfathering, which involved an alleviation for senior staff in the industry in the past who were not involved in lending, the regulator is saying all such measures have to be regulated again. That is a conversation that needs to be had. The consequences, if the implementation were willy-nilly, would be that there would be no jobs for these people in the industry. Conversations on this are needed.

The Central Bank has a role in regard to regulation. It is stronger than it was before. To return to the earlier point on operational issues, the banks' use of cost-income ratio as a justification for action has to be balanced against regulation generally.