Dáil Éireann Debate, Tuesday - 5 July 2016
153. Deputy Pearse Doherty asked the Minister for Finance how the loan-to-income and loan-to-value rules under the Central Bank's macro-prudential lending rules interact with each other; if there is a formula in place that limits the leeway for exceptions that can be used under one rule at the expense of the other; and if he will make a statement on the matter. [19784/16]
Amharc ar fhreagraThe Central Bank of Ireland has advised me that there is no restriction on the interaction between the loan to value (LTV) and the loan to income (LTI) residential mortgage lending macro prudential rules. For principal dwelling home mortgage lending, up to 15% of new lending is allowed above the LTV thresholds and up to 20% of new lending is allowed above the LTI threshold. The Central Bank does not prescribe how the lending above the LTV and LTI limits thresholds should take place. This is a matter for banks' own credit standards and lending policies.
It should be noted that the macro prudential policies as set out by the Central Bank are complementary to micro-prudential regulation and to lenders' own risk management practices and are not a substitute for lenders' own credit risk assessments and decisions. In addition, lenders will also be required to comply with the requirements of Consumer Protection Code and other consumer protection measures when considering and making decisions on applications for mortgage credit.
