Tuesday 12 December 2017

Stress tests more worry for buyers

Forcing the banks to stress-test mortgage applications to determine how borrowers would be able to cope with a 2pc increase in interest rates would have been a good idea -- five or six years ago when the property bubble was inflating to unsustainable levels.

Now the worry must be that the introduction of such regulations will merely make mortgages even more difficult to obtain and further depress the property market.

Irish regulators seem to be good at regulating for the last disaster. Since the property bubble popped in 2007 and the banks effectively went bust the following year our system of financial regulation has been completely overhauled. Both the Central Bank and the Financial Regulator have new bosses and the previous somnolent "regulation" has been replaced by a far tougher regime.

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