Mr. Robert Mulhall:

I will respond to the previous point first and then lead into how we calculate the prevailing rate. Quite specifically, if customers started on a tracker mortgage then section 1 of their contract would have indicated the margin for their tracker mortgage. I think that is what the Deputy is referring to. The 4,000 customers we are talking about, however, did not start on a tracker mortgage so no such mortgage margin was defined in section 1. I think that is where the Deputy is trying to get to in respect of that clause 3.6.

To define a prevailing rate we looked at the underlying funding costs in the market at the time. It is worth noting that in 2008 and 2009 in the UK, where trackers were not withdrawn in some instances, tracker mortgages went up to 7% and exceeded that. The reference rate for what was likely to happen given the funding environment makes clear that it would have been a very expensive product. We considered it from the point of view of cost of funds, cost of risk etc. and had that verified by an external party to ensure independence and that it was a fair treatment of what the model would have told in terms of what the prevailing rates would have been in the intervening period.