Mr. Bernard Byrne:

On that margin, the prevailing rate was 4.91% when it was first introduced, as the Deputy knows, so the cost has reduced over that period. The implication is that the risk of funding off an ECB rate had changed and therefore the cost of an overall tracker at that rate was higher, considering the historical margin. In the same way we can demonstrate that the margins had changed historically - even the rates I have quoted change from 0.42% to 1.6% - it is evident that there was a difference in margins at different times. If one looks back at this historically, standard variable rates, SVRs, and trackers were quite closely correlated for most of history. The disconnection took place after the financial crisis following the ECB disconnecting from funding rates. The ECB rate became a non-fundable rate in the marketplace and therefore the cost of a tracker at an ECB rate would have had a higher margin and it would have equated it back in the same sort of territory as an SVR, if not higher.