Mr. Eddie Cullen:

Earlier Mr. Cunningham gave a comprehensive answer on interest rates but I will make a couple of comments. Ulster Bank has an opportunity to compare Ireland and the UK, particularly in the area of SME franchises. We have seen little different in SME margins between this economy and that of the United Kingdom, which reflects some of the points made by Mr. Cunningham. The economy in the banking sector is similar in Ireland and the UK when compared with the Continent where there are some significant differences. Another issue came out in the presentation made by the Strategic Banking Corporation of Ireland, SBCI. It revealed that the capital held by Irish banks, on balance, is higher than the capital held by European banks. I will put that in a more technical manner. The risk weighted asset intensity in an Irish bank is significantly higher than a European bank. Some of that is due to the legacy position because the capital one carries relates to the recent impairment. That is just the technical way that capital is calculated in banks. I do not think one can say any Irish bank is creaming it when one considers the returns in capital being generated by Irish banks is, in general, in single digits. That is the reality of where we are at. It is important to make a distinction between how the European economy operates versus how the Irish or UK economy operates. That drives some of the differences.

I will add, in terms of the presumption that there was some sort of targeting of the tenor. In Ulster Bank, as I think in all banks, we proactively engaged with the Department, the Minister and the SBCI when the product was put to us. There was a very narrow window to carry out a lot of work to get the product ready and make sure our front-line staff were ready to deal with the product. In our business, as the committee has heard when Dr. Byrne made her presentation, there was a very narrow window when the applications came in. We did a lot of overtime and weekend working was necessary to deal with the volume of applications. We took the product at face value and delivered it to the market and our customers, based on where the demand came from.