Terence Flanagan (Dublin North East, Renua Ireland)
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22. To ask the Minister for Finance the impact that the new Central Bank of Ireland rules regarding mortgage lending have had on the property market; and if he will make a statement on the matter. [1272/16]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank of Ireland, in line with its mandate to safeguard financial stability, has put in place macro-prudential measures for new residential mortgage lending.  These measures apply proportionate loan-to-value and loan-to-income limits to mortgage lending by regulated financial service providers in the Irish market.  The key objective of these measures is to increase the resilience of the banking and household sectors to the housing sector and to reduce the risk of bank credit and house price spirals from developing in the future. 

The Central Bank is independent in the formulation and implementation of these macro prudential measures.  At the outset of this new framework, the Central Bank committed itself to monitoring the implemented measures, in particular with regard to achieving the stated objectives of the measures and monitoring any unintended consequences.  In recent public comments, the new Governor of the Central Bank, Philip Lane, re-affirmed this commitment and stated that, having introduced these macro prudential rules, it is the responsibility of the Central Bank to be as rigorous as possible in interpreting the impact of these rules.  In that context he also indicated that, by the second half of this year, the new rules will have been in effective operation for around a full year and that a year of data will also have come in on how it has affected the allocation of mortgages in Ireland.  Following on from this, I have been informed by the Central Bank that it will publish studies assessing the operation of the rules and of what it is seeing in the market in the second half of 2016.  While no further detail on the format of this work is available at this time, the Governor nevertheless did indicate that if the Central Bank sees strong reasons to vary the rules then it would be open minded about making an adjustment if the analysis suggests that a change, in either direction, is appropriate.  However, this will be a matter for the Central Bank to consider in due course.