Mr. Ed Sibley:

I do not fundamentally have an issue with the objectives of the Bill. We very much want to see the functioning of the mortgage market improve. There is no disagreement from the Central Bank that the market is not functioning as it should be. It is better than it was and continues to improve but it is not where it needs to be. There are caps in place and we are aware of them. As the Deputy stated these are set by legislation but an alternative might be to designate the Central Bank as the competent authority in that regard.

In terms of setting reference rates, the danger in going down that path is that there could well be a tendency to migrate towards them. To use an analogy, with the macro-prudential mortgage measures that were implemented, we have seen there is a tendency to treat those in an incorrect way potentially as targets rather than necessarily banks making individual decisions from a risk basis. We would not necessarily rule it out but the concerns we have about this Bill are around the side effects and unintended consequences of it. If other things are being looked at, that is fine, but we need to make sure we are focused on the outcomes we want, the factors that are causing the problem that we perceive and then legislate if we are going to legislate on that basis.