While the choice of mortgage product ultimately rests with the individual customer and the lending institution concerned, as Minister for Finance, I have consistently highlighted the need for responsible behaviour by both borrowers and lenders and in particular the need to factor into their financial decision making the effects of potential future changes in economic and financial conditions.
Under the legislative framework for the regulation of financial services, the Financial Regulator has a statutory mandate to safeguard the interests of consumers. Under its Consumer Protection Code, the Financial Regulator has introduced a broad range of consumer protection measures relating to the sale of financial products, including mortgages. These measures include suitability tests, know your customer fact finding and the provision of sufficient information to customers. In addition, from 1 January 2007 staff providing advice or selling mortgage loans must meet minimum competency requirements laid down by the Financial Regulator.
The Financial Regulator publishes a guide called "Mortgages made Easy" available on its website or from its Consumer Information Office which stresses all the issues that need to be taken into consideration by consumers when deciding on the type of mortgage which suits their personal circumstances best.
The information being made available by the Financial Regulator, together with statutory information and warnings in the case of mortgages under the Consumer Credit Act, 1995 serve as an adequate basis for consumers to make a decision about the type of mortgage which best suits their financial needs. It is obviously important in making such decisions that both prospective borrowers and lenders are highly cognisant of the prospect of changes in economic and financial conditions particularly over the long time horizon applicable to a mortgage.
In terms of both prudential supervision and safeguarding the interests of consumers, I would like to reiterate the point the Financial Regulator has made many times before that there is a clear onus on the boards and management of individual institutions to ensure that they maintain prudent lending standards. The Financial Regulator continues to scrutinise banks' lending policies as part of its ongoing supervisory activity.
Finally, in assessing the statistics referred to by the Deputy it is important to make the point that the data published by the Department of the Environment, Heritage and Local Government refers to new loans approved by credit institutions and, therefore, it does not capture changes to these loans such as when the borrower commences to repay capital, whether on a regular or once-off basis.