Professor Philip Lane:

While those are important concerns, it is also important to relate them to what we observe. I am concerned and the Central Bank is concerned. We know mortgages are here for a long time and many mortgages are reliant on the current interest rate environment. From our most recent ECB meeting we know there is no immediate threat to the ECB policy rate. Preparing for the future in which interest rates will increase is a concern for everybody.

I do not disagree with the Deputy's point that private equity funds may charge different interest rates to banks which have deep ties to the economy. However, due to the economics of doubling rates, which would drive many people into default, it is not a high probability scenario. Given that the CCMA covers the credit servicing firms they use, if an interest rate is such that a person goes into arrears, the CCMA provides a lot of protection.