Dr. Robert Kelly:

I will come in on the questions directed towards us. On interest rates, yes, we have seen deposit rate changes, most recently last week. As was pointed out, the operational framework review had an additional technical change. They are closing the corridor. What it means for trackers, which are priced to the MRO, is they will see an additional 35 basis point reduction in their mortgage rates.

More generally, we know there is quite a lot of segmentation across the mortgage book. Many people have fixed-rate loans, so the reset will come when the time expires. On the SVRs, my expectation is it would be symmetric with how we saw the rise. There were various degrees of pass-through. It comes with a lag. It is a commercial decision for individual banks in that pass-through, but the expectation would be that we see something symmetric relative to what we saw on the way up.

The Deputy also asked about access to finance for small builders and realisation. It is important to segment this into two components. One is debt financing – raising debt. I think there are products from the likes of Home Building Finance Ireland that are targeted at smaller builders, and it has raised a balance sheet of approximately €300 million since 2019. It has products that particularly target small builders. The retail banking system also has precommitments and they are doing something a little bit different. They total about €1.25 billion and they are trying to do a partnership model. I think the biggest challenge is the other side, which is the equity component. Builders will need to provide equity to go with the debt for the total package. The challenge for smaller builders is that much of that means retained earnings, for example. They have to come up with the equity themselves. When they become larger, it is easier to access external capital, for example. There are ways in which the State can help with this, such as the NTMA’s strategic investment fund. It can tranche to crowd-in. There are projects there. Even the design of the retail banking system and this dual model is to allow smaller builders - it comes back to that scale point mentioned earlier - to overcome this challenge they see of creating equity. The reality is – not to bring us back to where we started – that the equity piece comes back to the viability, derisking and making it more attractive for the external investment to come in.