Thank you, Mr. Chairman.
Welcome, Mr. Carney. Since our entrusting ourselves to you, this is our first opportunity to have an in-depth discussion. I believe that this is the first time that elected representatives are able to state such a thing. We had the opportunity to meet with you previously, and you have our full confidence in your ability to fill this important office. I must tell you that you have been truly deserving of this trust since your arrival.
I would like to deal specifically with the repercussions for consumer loans. In a rather cryptic sentence, that I will read into the record in the English version, because the translation, unfortunately, is not very good, we find the following:
Banks have shown a willingness to borrow at these higher spreads in order to secure longer-term financing, but have not yet fully passed these increased spreads on to businesses and households. Nevertheless, the absolute cost of borrowing by banks has declined...
I'm on page 19 of the English.
Let us take a look at the spread that exists between the official rate and a five-year mortgage loan, which is a concrete standard example that is easy to follow. Ten years ago, in 1998, the bank rate varied between 5.25 and 5.75%. I will use the 5.5 rate of October 1998. There was a difference of 1.25%. Thus, with the rate at 5.5%, you could get a five-year mortgage for 6.75%. That was pretty much average at the time.
Let us now go to December 2006, already some 18 months ago. The rate was then of 4.5%. The difference was of 1.95%, close to 2%. That was quite a hefty increase, but it was still within the range. A little bit later, in April 2007, we were still at 4.5% and then, all of a sudden, the difference moved to 2%, 1.99% to be exact. A 2% difference looked more like some kind of a margin for prudence, rather than for modesty. Today, there is no longer any modesty whatsoever. In September 2007, the rate was of 4.75% and, all of a sudden, there was a difference of 2.44%. In March 2008, in other words last month, the rate was set at 3.75%, but there was a difference of 3.44%. Therefore, even with a 1% drop, we are still sitting at 7.19% for a five-year mortgage.
Those are your numbers.