Central Bank Consultation - Policy for mortgage lending


#1109

Not in Ireland it doesn’t :laughing:
It means you’ve just won yourself a free house…Better Call Hall


#1110

:mrgreen: awesome, sums up so many things!


#1111

Lets call him HAL - (The) Housing Advice Leprechaun


#1112

We need the Troika back to save us from ourselves

ESRI puts pressure on Central Bank to ease its mortgage lending rules
independent.ie/business/pers … 44100.html

So basically, the CB should concern itself with the # of houses being built and design it’s rules on fiscal supply around what Irish Builders are doing/not doing!
And do this twice a year…the rules would be all over the place


#1113

Kieran McQuinn would want to remind himself what the Central Bank’s remit is. It is not concerned with housing policy. If loans >80% value or 3.5 times income are a systemic risk to the financial system why would the level of house building have any affect on this?
This would clearly lead to reduction in house building in order to trigger higher loan availability to allow houses to be sold at a greater profit XX


#1114

Heard them on the radio this morning. What would this ‘rules-based’ approach actually look like? He’s saying there would be certain criteria that would trigger the rules to be lifted or eased, and then when building activity gets ‘too high’, the rules kick in again.

Would this not lead to fairly sharp artificial ups and downs in the market? You’d have people house-hunting with mortgage approval for, say, a 92% loan only to learn that a certain arbitrary threshold for building activity has been reached and the credit restrictions are coming back in. (“Hello, Joe? It’s not fair, Joe…”) Equally, sellers might be wise to time sales until an easy credit window opens. Sounds a bit messy.

Was there one of the case studies presented in the CB consultation that does it this way? Hong Kong or some such? I’m sure it was looked at. I’ve a vague memory of Honohan ruling out this approach.


#1115

The current situation would be easily resolved by the govt getting off their arses and building some social housing.

Presumably now that our debt-to-fantasy-GDP is looking healthier, govt borrowing to fund this is possible.


#1116

Given the expense to which NAMA has gone to to maintain the domestic market price of Irish property by holding masses of vacant property and drip feeding supply only to foreign venture capital funds. This being in order to make the state-owned banks look less insolvent and reduce perceived negative equity the idea that government would now abandon this policy and start supplying housing seems as unlikely as it would be desirable.


#1117

My understanding is that borrowing for capital projects has been allowable all along? Certainly I’ve heard others claim that, although I haven’t checked the EU rules to confirm.

The fact that we can borrow money more or less free for 30 years makes the lack of social housing being built all the more disheartening.


#1118

Isn’t the point of the central bank rules meant to be to ensure the banks have sustainable lending practices and don’t expose themselves to an unnecessary risk of default?

How on earth would temporary relaxations to encourage house building assist with that?


#1119

+1


#1120

Where?

So now they are selling it too slowly? I thought the narrative de jour was that they are recklessly selling the family silverware to foreign vultures at knockdown prices?


#1121

He’s talking past tense. There were plenty of threads on these if you care to look.

Check out the NamaWatch forum
viewforum.php?f=50


#1122

Exactly. The ESRI were saying the CB was interpreting its job in a very narrow way; that they only look at regulating the banks and ensuring there isn’t a bubble. The argument is that they should take a broader view and consider the impact on people who want to borrow big and buy, and builders who want to build and employ people etc.

At a Dail committee 15 years hence, no ex-governor of the CB will be able to defend loose regulation by arguing that at least they helped people on the ladder and got the building trade going at full tilt again.

And it’s not just a matter of preference. The CB’s remit is set out in law.


#1123

Really?

Cause that reads very like he/she believes that it is still occurring (not that I believe NAMA ever deliberately stockpiled empty residential dwellings)


#1124

I think the correct tense is the present perfect progressive “Nama has been stockpiling…” or “Nama have been stockpiling…”, depending on whether you consider Nama as a single corporate entity or a group of people acting in concert.

From the fount of all knowledge, Wikipedia…

A present tense is used, but it’s the past portion of the action to which attention is being drawn, so you’re both right. :smiley:


#1125

Government policy did appear to be to allow property prices to rise by doing shag all about the supply problem other than worry a little bit…

independent.ie/business/pers … 68455.html

…and after supply constraints had forced prices up again everyone would be happy. Prices would rise, developers would develop, banks with free money from the ECB would lend…where could that plan have possibly gone wrong? XX

…thank f**K for Central Bank Lending rules restricting credit supply… anyone who thinks otherwise is an idiot or a VI (or both)


#1126

IMF states that the rules should not be changed:
IMF Staff Completes 2016 Financial Sector Assessment Program (FSAP) Mission to Ireland
Press Release No. 16/113
March 16, 2016
imf.org/external/np/sec/pr/2016/pr16113.htm


#1127

Where do you see that?

All I see is:

“The measures, however, are still very new; more information is needed before trying to refine their calibration.”


#1128

That is what I took to mean that the rules should not be changed.