OREANDA-NEWS. The Central Bank of Ireland is today announcing details of the call for evidence which will inform the review of the impact and effectiveness of its macroprudential mortgage market measures which were introduced to enhance resilience of households and banks and to protect households from a house-price cycle emerging again.  The Central Bank welcomes data-based and other analytical submissions to inform its assessment. Submissions of evidence can be made at centralbank.ie.

Speaking at the publication of the review, Deputy Governor Sharon Donnery said “The review will be informed by a public call for evidence on the impact of the measures.  The call for evidence will remain open from 15 June to 10 August.

Macro-Financial Review

The Macro-Financial Review offers an overview of the current state of the macro-financial environment in Ireland. Monitoring macro-financial developments and risks is an important task for the Central Bank. This report aims to assist our key stakeholders - the public, financial market participants, and national and international authorities – in better evaluating financial risks..

The macro-financial environment has improved, with strong growth in 2015 and growth projected for both 2016 and 2017.  External factors like the forthcoming referendum on the UK’s membership of the EU and geopolitical tensions are all risks that lead to uncertainty.

The report concludes that a vote for the UK to leave the EU would have both short-term and long-term impacts on Ireland.  A negative impact on Irish exports to the UKcould be expected.  The Central Bank has been engaging with financial sector firms to assess their preparedness for the risks associated with Brexit.

Household debt, while declining, remains high, leaving households vulnerable to adverse movements in income or interest rates.  The General Government gross debt-to-GDP ratio remains high, leaving the public finances vulnerable to economic and financial shocks.  Maintaining fiscal discipline is necessary to keep the public finances on a sustainable path.

The workout of impaired loans and the disposal of non-performing loans in the banking sector are ongoing, with non-performing loans and related provisions remaining elevated.   Bank capital has improved, with domestic banks returning to profitability, but that remains weak and varies at an individual level.

The domestic non-life insurance sector faces a difficult operating environment with all of the high-impact firms reporting underwriting losses in 2015 primarily due to current challenges in the Irish motor market.  In the non-bank financial intermediaries sector, risks centre on the potential for intermediaries in Ireland and abroad to play a destabilising role in international financial markets at times of market stress.