Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

As I have indicated, the Central Bank recently published a consultation paper on macro-prudential measures for residential mortgage lending. The bank is required to consult the Minister for Finance on proposed measures in this area. It may also consult others, as it considers appropriate. Given the wide public interest in this matter, I welcome the commencement by the Central Bank of a public consultation process on its macro-prudential proposals. I normally take the opportunity to reply to such Central Bank consultation processes. As the Deputy will be aware, the deadline for providing comments for the Central Bank is 8 December next. My Department is committed, under the Construction 2020 strategy, to examining the concept of a mortgage insurance scheme and how it might benefit new housing completions in the Irish market. The objective of any such scheme would be to help to ensure the adequate availability of mortgage finance on affordable terms for new completions.

To further assist the evaluation and consideration of such a measure, I recently wrote to the Chairman of the Joint Committee on Finance and Public Expenditure and Reform. I asked the committee to consider the matter of mortgage insurance in an Irish context and, drawing on the experiences of other countries, prepare a report on the issue. It is considered that the committee is the most qualified and appropriate forum to conduct such an examination. In other countries mortgage insurance schemes can operate with macro-prudential frameworks. This is recognised in the Central Bank consultation paper which asks whether some adequately insured mortgages with higher loan-to-value ratios should be exempt from the proposed measures. Obviously, this is a matter that will require discussion and consideration as part of the Central Bank's consultation process. To answer the Deputy's question precisely, they are two separate issues, but they are obviously connected. They will be connected as people debate the issue.

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