Noel Rock (Dublin North West, Fine Gael)
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151. To ask the Minister for Finance if any oversight is being conducted to ensure that mortgage approvals, which have jumped by 42%, are being made in a cautious and responsible manner to prevent another housing bubble crisis; and if he will make a statement on the matter. [16806/17]

Michael Noonan (Limerick City, Fine Gael)
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The Central Bank is the macro prudential authority in Ireland and it has a range of policy instruments available to it, including the macro prudential measures for residential mortgage lending and the counter-cyclical capital buffer (CCyB) and the other systemically important institution (O-SII) buffer, to help ensure the stability of the financial system.

The residential mortgage lending measures, which provide for certain loan to value and loan to income restrictions on mortgage lending, have the objective of increasing the resilience of the banking and household sectors to the property market and reducing the risk of bank credit and housing price spirals from developing in the future. The CcyB is a time varying capital requirement and is designed to make the banking system more resilient and less pro-cyclical; essentially the CCyB will increase the capital requirement of banks when credit growth is "excessive".

The Central Bank's framework for macro prudential policy elaborates the aims of such policies, which are to:

- strengthen the resilience of the financial system so that it can withstand adverse movements in credit and property cycles or the impact of other economic shocks;

- reduce the potential for vulnerabilities that could lead to the accumulation of financial distress. (Many of the vulnerabilities arise through the pro-cyclicality of the credit cycle).

Both of these aims are key priorities of the Central Bank in its dual mission to 'safeguard stability and protect consumers'.

The Central Bank keeps credit conditions in the Irish economy and it macro prudential policy instruments under review, and calibrates them as considered appropriate. The Central Bank reviews its mortgage lending measures on an annual basis (details are available at www.centralbank.ie/financial-system/financial-stability/macro-prudential-policy/mortgage-measures and the most recent changes to the lending rules came into effect from the start of this year) and it calibrates its CCyB on a quarterly basis (its quarterly assessments are available at www.centralbank.ie/financial-system/financial-stability/macro-prudential-policy/countercyclical-capital-buffer).

These measures are also complementary to existing micro prudential supervision, and to lenders' own risk management practices. The introduction of the Single Supervisory Mechanism (SSM) in November 2014 brought about a fundamental change to the supervision of banking in Ireland and in other participating Member States. The SSM approach to supervision is risk-based. It takes into account both the degree of damage which the failure of an institution could cause to financial stability and the likelihood of such a failure occurring. Where the SSM judges that there are increased risks to a credit institution or group of credit institutions, those credit institutions will be supervised more intensively until the relevant risks decrease to an adequate level. The SSM approach to supervision is based on qualitative and quantitative approaches, and involves judgment and forward-looking critical assessment. In this context it can be noted that credit risk is a key priority for the SSM in 2017.