For many types of retail loans, but particularly residential real estate loans, secondary market pricing has the strongest influence on rate setting.
When capital is considered, it is the internal allocation decisions--what the Basel proposal refers to as economic capital--that is relevant, particularly because, as I noted earlier, U.S. banks operate so far above regulatory minimums and can easily change their own regulatory requirements by loan sales and securitizations. On the subject of Basel II, let me, in conclusion, make a few summary observations.