The Macroprudential Mortgage Measures Ten Years on: Taking Stock1Cantillon Lecture, at the 48th Dublin Economics WorkshopTwenty years ago, Ireland was in the midst of an unsustainable, credit-driven property boom, rooted in weak lending standards. Those shaky macro-financial foundations, amplified by underlying fiscal vulnerabilities, eventually led to Ireland’s financial and subsequent economic crisis. Ten years ago, as the economy was recovering from that crisis, the Central Bank introduced new macroprudential measures to guard against the risk of such an episode reoccurring. Or, as Governor Patrick Honohan put it at the time, to “protect the new generation [that is] establishing households – and the nation at large, from the risk of a repetition of what happened before”.2The introduction of the measures did not happen in a vacuum. At an international level, the global financial crisis led to widespread reforms to the regulatory architecture, from stronger prudential standards to an enhanced approach to supervision. The post-crisis financial architecture also saw the introduction of a new policy framework altogether: macroprudential policy. This entailed a shift in thinking, by explicitly taking a system-wide lens on resilience and focusing on the interaction between finance and the broader economy.3 The mortgage measures were Ireland’s first macroprudential intervention. Indeed, back in 2015, we were amongst the first European adopters of mortgage market interventions with an explicit macroprudential objective. A decade on, these are now well established tools at a global level. The measures have not been without debate. When they were first proposed, the Central Bank received the highest number of responses to any of our consultations, surfacing a range of strongly-held views amongst the public. This is not surprising. The measures affect people very directly. Buying a house is the most important financial decision that most people will make in their lives. And mortgages are the largest form of borrowing by households. So the measures matter for individuals, and they matter for the economy as a whole. Indeed, I would characterise the measures as being amongst the most important public policy interventions introduced by the Central Bank, both from a macro-stabilisation perspective and from a consumer protection perspective. In that context, now that we have a decade of experience with the mortgage measures in place, I wanted to take this opportunity to take stock of the lessons we have learned over the past decade. How have the measures fared over that period? What have we learned about how they affect the economy, and where do we need to make further progress? And what lies ahead? The why and the howBut let me start with what a brief reminder of the why and the how of the measures. On the why, put simply, they aim to ensure that lending standards in the mortgage market remain sustainable over time. In doing so, they support the resilience of borrowers, lenders and the broader economy. And they seek to prevent the emergence of an adverse and unsustainable feedback loop between credit and house prices.4These can come across as somewhat abstract concepts. But, as we learned in a very painful way in Ireland – the damage of not achieving these objectives is anything but abstract. The costs of the financial crisis on society were very large. These costs were clearly felt by the large number of mortgagors that were over-indebted and found themselves in financial distress. But they were also felt by those not in the mortgage market, because the financial crisis morphed into an economic crisis, affecting everyone in the country. And some of these costs have been persistent. For example, the long-lasting scars of the crisis on the construction sector are still weighing on housing supply today, with significant adverse effects on younger generations. On different metrics, the Irish financial crisis was amongst the most costly, even compared against systemic crises in other advanced economies (Chart 1). And, of course, behind all these numbers are people, for whom the damage of the financial crisis was deeply personal.Chart 1: The costs of the Irish financial crisis were very large, even compared to other systemic crises in advanced economiesSource: Laeven and Valencia (2020), ‘Systemic Banking Crises Database II’. IMF Econ Rev 68, 307–361.This broad lens is important in terms of how we think about the objectives of the measures. Unlike what I sometimes hear, the measures, like all our regulatory interventions, are not there to ‘protect the banks’. They are there to guard against the damaging effects of unsustainable mortgage lending on society as a whole, now and into the future.On the how, the measures effectively constrain the share of new mortgages that lenders can extend at higher levels of indebtedness. But let me highlight three elements of their design in particular.First, there are two limits: one based on the size of the loan relative to borrowers’ income (LTI) and one relative to the value of the property (LTV). These have different, but complementary, aims. The LTI limit acts as a long-term anchor between developments in the mortgage market and household incomes and supports mortgage affordability, while the LTV limit provides a buffer against house price falls and the risk of negative equity. Second, the measures are not designed to act as hard caps. The framework incorporates so-called ‘allowances’, meaning that lenders can extend a share of new lending above the limits. These allowances are important and provide flexibility for individual circumstances to be taken into account by lenders. Because, ultimately, the measures are not there to replace lenders’ own responsible lending standards, they are there to act as system-wide guardrails.Third, there is a differential treatment by borrower type. The evidence is clear that, other things equal, first-time buyers (FTBs) have had a lower default propensity than second and subsequent buyers (SSBs).5 The role of SSBs in housing market dynamics is also very different: as they already own a home, in an environment of rising house prices, they have additional resources available for future purchases and, therefore, a greater propensity to amplify cycles.6 So the LTI limit is set at 4 times income for FTBs, and 3.5 times income for SSBs. The design of the measures has been tailored to the structure of the Irish mortgage and housing markets. And, importantly, that design has evolved since their introduction in 2015, as we have learned more about their operational effectiveness over time, a theme that I’ll come back to later. How have the measures delivered against their objectives over the past decade?So what have we learned about the effectiveness of the mortgage measures in achieving their objectives over the past decade? Analytically, this is not an easy question to answer with precision. The macro-financial benefits of the measures are not directly observable: indeed, they stem from the absence of things, such as unsustainable booms and busts, over-indebtedness or the emergence of widespread financial distress. The benefits of the measures are also long-term in nature: they may not be immediately obvious today, but they can become more evident in times of stress. What we do know is that the broader environment in which the measures have been operating over the past decade has been testing – and, in the second half of the decade, shock-prone. For much of the period, the process of post-crisis balance sheet repair by both banks and households was still ongoing. In the housing market, we have had a persistent shortage of supply relative to demand, putting upward pressure on the cost of places to live, whether to buy or to rent. Halfway through the decade we saw the onset of a global pandemic, followed by the energy crisis triggered by Russia’s invasion of Ukraine, very high inflation and sharply rising interest rates. So what have we learned about the effectiveness of the measures in that environment?7Let me start with resilience. An environment of rising house prices relative to incomes could have created the conditions for a ramp-up in highly-indebted households. Indeed, that was precisely the pattern in the last housing cycle in the 2000s (Chart 2). And we know that it is highly-indebted households that are both most vulnerable to default, and also more likely to cut spending in a downturn, amplifying economic stresses.8 The measures have guarded against such dynamics. Indeed, unlike the last cycle, the increase in house prices has not led to a sharp increase in highly-indebted mortgagors. Mortgage credit has been flowing to the economy in aggregate, but the measures have constrained the emergence of a tail of highly-indebted households.Chart 2: Unlike the last cycle, rising house prices relative to incomes have not led to an increase in highly-indebted borrowersSource: Central Bank of Ireland and CSO.In turn, these more sustainable lending standards have contributed to lower levels of financial distress amongst mortgagors. For a prolonged period, Ireland had much higher levels of new mortgage defaults than the rest of the EU. Even as late as 2019, when the economy had recovered and unemployment was low, new mortgage defaults in Ireland were double the EU average. That gap has now closed, pointing to greater underlying resilience of borrowers (Chart 3). And, if one looks deeper, where we have seen evidence of distress, whether it is those that opted for payment breaks at the start of the pandemic, or those borrowers that did flow into default in the more recent episode of high inflation and rising interest rates, that distress has predominantly manifested in mortgages issued before the financial crisis, at much weaker lending standards (Chart 4).9 Of course, there are limits to how much we can infer from this. Government interventions supported households in response to the big shocks of the past decade – whether the pandemic or the cost of living crisis. But the evidence points to a strengthening of underlying resilience of borrowers and lenders.Chart 3: New flows into mortgage default in Ireland have converged to the euro area average over the past decadeSource: EBA Risk DashboardNote: EU average consists of AT, BE EE,FI,FR,DE,IE,LT,LU,NL, PT, ES & IT.Chart 4: Mortgages that defaulted over 2023-2024 were predominantly issued at weaker lending standards before the financial crisisSource: Central Bank of Ireland.While the mortgage measures have strengthened resilience of new borrowers, the long shadow of past unsustainable lending practices remains, as evident by the cohort of borrowers on long-term mortgage arrears. While we have seen a marked reduction in the number of mortgage accounts in long-term arrears in recent years, there is still more to be done. So we remain focused on arrears resolution. We have continuously challenged regulated entities to do more to support borrowers experiencing financial difficulty, and particularly those in long-term mortgage arrears. When a borrower is in, or facing arrears, our expectation is that regulated entities provide appropriate and sustainable solutions and engage with broader, system-wide solutions, such as mortgage-to-rent or personal insolvency arrangements. And, as part of our modernised Consumer Protection Code, which comes into effect early next year, we have incorporated important amendments to strengthen the Code of Conduct on Mortgage Arrears.What about the impact of the measures on guarding against an adverse feedback look between credit and house prices? Of course, and I need to be very clear on that, the mortgage measures do not, and indeed cannot, target house prices. House prices are affected by a range of factors, most fundamentally the balance between the underlying demand for, and supply of, housing in the economy. What the mortgage measures do seek to achieve is guard against an unsustainable relationship between credit and house prices from emerging, similar to what we saw in the 2000s. That is a subtle distinction, but an important one. Again, analytically, it is not easy to gauge with precision what might have happened in the absence of the measures. Still, there now is a body of evidence that macroprudential measures in the mortgage market reduce house price growth relative to what might otherwise have been the case (Chart 5).10 The measures can also reduce the tail of expectations of future house price increases, which can act as an important amplification mechanism, if market participants borrow on the expectation of rapidly rising house prices in the future. Indeed, in Ireland, we did see a meaningful reduction in the tail of house price expectations upon the introduction of the measures (Chart 6).Chart 5: Cross-country evidence suggests that the introduction of mortgage measures lowers house prices growthSource: Morretti and Riva (2025). Note: Treatment variable is the introduction of borrower-based measures in a given country (LTV or income-based limits). Outcome variable is the growth in the house price index. Shaded areas report 90% confidence intervals.Chart 6: The tail of positive house price growth expectations in Ireland fell after the introduction of the mortgage measuresSource: McCann and Riva (forthcoming).Of course, over the past decade, we have seen continued increases in house prices relative to incomes in Ireland. This begs the question as to the drivers of those house price developments. For me, a good diagnostic is the relationship between house prices and rents: effectively the rental yield. In the period before the financial crisis, house prices increased much faster than rents, leading to a compression in the rental yield. That is consistent with loose credit conditions playing a key role in driving house prices. Over the past decade, however, rents and house prices have both increased significantly, and both have risen faster than incomes (Chart 7). The rental yield has been broadly stable. That is consistent with the underlying factor driving house prices (and rents) being the imbalance between demand and supply for housing (Chart 8). Put differently, while the symptom of high house prices is evident in both the cycle of the 2000s and the current cycle, the underlying diagnosis is very different. And, what we have not had, is unsustainable lending standards further amplifying these house price dynamics.Chart 7: The relationship between rents and house prices is very different to the last cycle, pointing to supply-demand imbalances as the main driver of house pricesSource: CSO and Central Bank of Ireland calculations.Chart 8: Growth in the total housing stock has not kept up with the increase in Ireland’s population over the past decadeSource: CSO and Central Bank of Ireland calculations.Pulling this all together, the measures have played an important role in strengthening resilience of borrowers, lenders and the broader economy over the past decade. They have also guarded against the emergence of an adverse feedback loop between house prices and credit that we might have seen, had unsustainable lending practices emerged. These are substantial macro-financial benefits, especially in the environment of heightened economic volatility that we have been experiencing. Weighing benefits and costsOf course, as policymakers, we do not aim for resilience at any cost. That would not serve society well. Like all policy interventions, the mortgage measures entail both benefits and costs from the perspective of the economy as a whole. Our job is to balance these. Conceptually, the mortgage measures can entail economy-wide costs through different channels.11 For example, they can weigh on aggregate consumption through the required increase in savings by prospective homeowners to access mortgage finance or through the impact of the measures on house prices and, therefore, household wealth. There are also potential channels to business activity too. For example, small businesses often post residential property as collateral to access finance. So, by dampening house price growth, macroprudential measures can weigh on business borrowing and activity. Beyond those aggregate effects, we are very conscious that the measures have particular effects on certain segments of the population, especially some potential first-time buyers.12It was precisely because of the balance between benefits and costs, which we continuously aim to strike, that we recalibrated the measures in 2022, with a focus on first-time buyers. This was an important, and difficult, decision by the Central Bank, so let me elaborate briefly on the reasons. The mortgage measures, and especially the LTI limit, had become increasingly binding over time, particularly for first-time buyers, amid the continued growth in house prices relative to incomes (Chart 9). Now, if house prices are rising faster than incomes because of weakening lending standards or unsustainable credit dynamics, the fact that the measures are becoming more binding is a feature, not a bug: they are doing their job. But if house prices are rising faster than incomes due to structural factors – for example, underlying shifts in the supply of housing – that can affect the cost-benefit calculus of the calibration of the measures.Chart 9: Amid rising house prices relative to incomes, the measures had become very binding for first-time buyersSource: Central Bank of Ireland. In our analysis, part of the increase in house prices relative to incomes since the introduction of the measures had been due to structural factors. The recovery in housing supply had been slower than we had expected upon the introduction of the measures. Indeed, a more persistent pattern was becoming apparent, with fewer homes being built, for a given level of house prices relative to incomes, compared to the past (Chart 10), implying a gradually increasing cost of the measures.Chart 10: Since the financial crisis, fewer houses are being built, for a given level of house prices relative to incomesSource: CSO, PTSB/ESRI, Central Bank of Ireland calculations. Note: Completions prior to 2011 have been obtained by taking total estimates of (ESB) electricity connections and removing average number of connections in each year that are unrelated to dwelling completions.The flexibility embedded in the measures through the allowances meant that the framework had been able to mitigate the effects of these slow-moving changes over time. But we also wanted to ensure the measures were fit for the future. In that context, and given a broader strengthening of resilience of borrowers and lenders over the same period, we judged that we had some policy space to ease some of the costs of the measures, without disproportionally eroding their benefits. So we increased the LTI limit for FTBs from 3.5 to 4 times incomes, partly offset by a reduction in the allowances at the same time. We also made some other important adjustments, such as simplifying the framework for allowances and switching the differential between borrower types from the LTV limit to the LTI limit. These all reflected lessons learned over time around the operational effectiveness of the measures. As you would expect, we have been evaluating carefully the impact of these targeted adjustments. For example, some of the research we have conducted on the borrower-level impact of the changes points to some easing of costs through an increased probability of first-time buyers buying a newly-built property as well as greater access to mortgage finance by younger households.13 At the same time, the analysis also points to certain borrowers in Dublin purchasing more expensive homes following the recalibration, without that necessarily being explained by the quality characteristics. And while those borrowers account for around 2.5% of total market activity, this highlights some of the very real trade-offs that we face in considering the calibration of the measures. As I mentioned, that was not an easy decision for the Central Bank. Ultimately, though, it was a manifestation of the fact that we always seek to weigh the benefits and costs of our interventions, based on evidence, from the perspective of the public good. Deepening our understanding – priority areas While we have learned a lot over the past decade, both from our own experience and the experience of others, deepening our understanding of the impact of the measures is a continuous process. From a policymaker’s perspective, I wanted to highlight two priority areas in particular. The first relates to the analytical framework for weighing the costs and benefits of the measures. This applies to macroprudential policy overall, given that is still a relative ‘young’ discipline. By comparison, though, over the past 15 years, we have made substantial progress in developing a framework for assessing the benefits and costs of different levels of bank capital.14 For interventions like the mortgage measures, no such widely-accepted analytical framework exists globally. At the Central Bank, we have been building our capabilities in this area in recent years. For example, we have augmented some of our macroeconomic models to incorporate transmission channels for the mortgage measures, allowing us to better assess the trade-offs.15 We have also conducted research that seeks to compare the costs of the measures in terms of economic activity in the central case with the benefits in terms of reducing volatility of output.16 These are good starting points, though I would say that, at this stage, they are still nascent attempts to get us towards a comprehensive framework for weighing benefits and costs. There are also important conceptual questions that we need to tackle to make progress in this area. For example, most of the macroeconomic costs of the mortgage measures operate on the demand side of the economy, so should not have a permanent effect on the level of output. By contrast, the costs of financial crises are persistent, with some studies pointing to permanently negative effects on the size of the economy.17 Another example is that the benefits of the measures stem from making low probability events less damaging, a bit like an insurance payout. Whereas the costs of the measures are there in central expectation, similar to the premium on insurance. Unlike (most) insurable events, though, we cannot have a firm grip on the probabilities of these tail events, given how infrequent financial crises are. The second area that I would highlight as important to focus our analytical efforts on is the interaction between the mortgage measures and different aspects of the broader housing market. One important dimension is the interaction between the mortgage measures and housing supply. And, specifically, whether the measures affect how responsive supply is to house prices. We know that parts of the country where the mortgage measures have been most ‘binding’, because of higher house prices relative to incomes – are also the parts of the country where we have seen the biggest increase in housing supply (Chart 11). On the face of it, at least, this would suggest that housing supply has been responding to price signals. But this has also been explored more formally, with research suggesting that, accounting for constructions costs, there had been no change in the responsiveness of supply to house prices since the measures were introduced.18 Put differently, lower levels of housing supply than in the past can be explained by the rising cost of construction over time, rather than a lower sensitivity to house prices.Chart 11: Housing supply has been responding to price signals, despite the measures being more bindingSource: CSO and Central Bank of Ireland. Note: Completions per 1,000 pop. = units completed / 1000's of population (per county). Population data based on CSO annual population estimates.Another important dimension is the interaction between the mortgage measures and the rental market. Instinctively, it is natural to think that looser mortgage credit conditions might mean less pressure on the rental market, as more people are owner-occupiers. But, all else equal, more households in owner-occupation can also mean a smaller stock of rental properties available to remaining renters, with an unclear effects on rents. Ultimately, this is an empirical question – but the evidence remains sparse and mixed. Some of our own analysis has found that the introduction of the measures was associated with a modest increase in rental yields in the short term, albeit driven mainly by reduced house price growth, rather than higher rental growth (Chart 12).19 But other studies find a bigger effect of mortgage restrictions on rental growth and also highlight potential dependencies with other aspects of the rental market, such as the presence of institutional investors.20 Chart 12: Estimated impact of the introduction of the mortgage measures on rents and house pricesSource: Yao et al (2025)Overall, while we have learned a lot over the past decade, there is still further to go. I do not want this to come across as of academic interest. These questions matter for policy, and, therefore, they matter for the public that we serve. Ultimately, evidence-based policy is part of our DNA at the Central Bank. So it is a priority for us to continue to deepen our understanding of the effects of the measures, like all our policy interventions. Looking ahead Let me finish off by looking ahead. Of course, especially in light of the current levels of geoeconomic uncertainty globally, it can seem a fool’s errand to make statements about the future with much confidence. But, if I take a step back, my own judgement is that – over the course of the next decade, the environment in which the mortgage measures will operate may well be more challenging than the one that prevailed over the past decade. There’s three reasons for that.First, the financial crisis is now increasingly in the rear view mirror for many. From a political economy perspective, internationally, there is increasing focus on the ability of the financial system to support growth, which risks manifesting as a pro-cyclical turn of the global regulatory cycle. From the perspective of the financial system, the process of post-crisis balance sheet repair is now largely complete and there is greater focus on growth and expansion. From the perspective of the public, naturally, attention is on today’s challenges – including around housing affordability – rather than concerns about the costs of financial crises of the past. Second, domestically, there is, rightly, growing focus on policy measures to increase housing supply.21 This means that, over the next decade, we are likely to see higher housing market transactions – and, in turn, an associated increase in mortgage market activity. With house prices already elevated relative to household incomes, this combination of factors has the potential to create the conditions for rising indebtedness across the household sector, especially if lending standards in the mortgage market were to weaken. Finally, from a broader macroeconomic lens, we are facing a number of ongoing structural shifts, related to geopolitics, fragmentation of the global economy, artificial intelligence, demographics and the increasing frequency of extreme weather events due to climate change. These suggest that the environment for economic activity and inflation (and, therefore, also interest rates) will remain highly uncertain and, indeed, potentially more volatile. Put differently, we are facing a world with the potential for more frequent and larger supply-side shocks, which could test the financial position of households.It is precisely in such a more challenging environment that the benefits of the measures are also likely to be higher. So how do we ensure that they continue to do their job over the next decade? Let me cover three dimensions guiding our approach.First, we will continue to evaluate the measures on an ongoing basis, as we have done to date. If you look at the mortgage measures now, and compare them to when they were first introduced a decade ago, they have not been static. There have been adjustments to their design, to their calibration and to our overall policy strategy.22 This is important. To remain fit for purpose over time, all policy frameworks need to be able to evolve, amid broader structural changes in the economy and the financial system. And the fact that we have made adjustments is indicative that we are – and will remain – responsive to those changes, where justified by evidence. Second, we will continue to deepen our understanding of the benefits and the costs of the measures. To do so, we will not just rely on our own analysis. We also want to engage with external researchers, to benefit from broader perspectives and expertise. More broadly, as I mentioned upfront, when we first introduced the measures, we were amongst a very small number of European countries to have explicit macroprudential measures in the mortgage market. Now, these are a widely employed tool by macroprudential authorities across Europe, so we can also learn from others’ experience. Third, throughout, we will place particular emphasis on engagement, transparency and accountability. This is relevant to all our policy interventions, but it is especially important for interventions like the mortgage measures, which affect people very directly. Actively engaging with, and listening to, a broad range of stakeholders, and being transparent about our judgements and the rationale behind them, are essential foundations for accountability. This is the approach we have taken over the past decade – and our commitment to openness and transparency will remain steadfast into the future. Indeed, that will become even more important if the operating environment does become more challenging over the next decade. ConclusionLet me conclude. I am very conscious that I have spoken about the mortgage and housing markets from a macro-financial lens. But there is a critical societal dimension to the very real challenges people are facing in accessing affordable housing – whether to rent or to buy. At its core, that affordability challenge stems from the imbalance between housing supply and demand. Rightly, therefore, the core focus of public policy is on measures to boost housing supply. As that happens, it is important that dynamics in the mortgage market, which ultimately underpins housing activity, remain sustainable. That is the role of the mortgage measures. Over the course of the past decade, the measures have become increasingly accepted by the public that we serve in Ireland. This is an important foundation, because – looking ahead to the next decade – the environment in which the measures operate may well become more challenging. But that is also when the value of these interventions will be higher. Our focus will be on ensuring that the measures continue doing their job, always weighing their benefits and costs, from the perspective of the public good. Thank you for your attention.[1] I am very grateful to Mark Cassidy, Edward Gaffney, Niamh Hallissey, Patrick Haran, Conor Kavanagh, Gerard Kennedy, Eoin O’Brien, Cian O’Neill, and Maria Woods for their advice and suggestions in preparing these remarks.[2] Honahan (2014) ‘Household indebtedness – rhetoric and action’, address at the Money Advice and Budgeting Service Annual Conference.[3] Makhlouf (2021) ‘Birth, growth and towards maturity: macroprudential policy in Ireland, remarks at the ESRI.[4] For more information, see our macro-prudential mortgage measures framework.[5] See, for example, Kelly et al (2015) ‘Designing Macro-prudential Policy in Mortgage Lending: Do First Time Buyers Default Less?, Central Bank of Ireland, Research Technical Paper, 2015, No. 2 and Giuliana (2019) ‘Have First Time Buyers continued to default less?’ Central Bank of Ireland, Financial Stability Note, 2019, No. 14.[6] See Box 5 in Central Bank of Ireland (2021) ‘Consultation Paper 146: Mortgage Measures Framework Review’.[7] For a summary of insights that can be drawn from the research and analysis carried out by Central Bank staff since the introduction of the measures, see Gaffney et al (2025), 'Borrower-based mortgage measures: lessons from Ireland's experience since 2015', Central Bank of Ireland, Signed Article, 2025, No. 4. [8] For Irish evidence on highly indebted households and default risk, see Lydon and McCarthy (2011) ‘What Lies Beneath? Understanding Recent Trends in Irish Mortgage Arrears’, Central Bank of Ireland, Research Technical Paper, 2011, No. 14, and McCarthy (2014) ‘Dis-entangling the mortgage arrears crisis: The role of the labour market, income volatility and housing equity’, Central Bank of Ireland Research Technical Paper, 2014, No. 2. For Irish evidence on highly-indebted households and spending, see Le Blanc and Lydon (2019) ‘Indebtedness and spending: What happens when the music stops?, Central Bank of Ireland, Research Technical Paper, 2020, No. 14, and Fasianos and Lydon (2021) ‘Do households with debt cut back their consumption more in response to shocks? Central Bank of Ireland, Research Technical Paper, 2021, No. 14.[9] On payment breaks during the pandemic, see Gaffney and Greany (2020) ‘COVID-19 payment breaks on residential mortgages’, Central Bank of Ireland, Financial Stability Note, 2020, No. 5.[10] For Ireland, see, for example, Kelly et al (2018) ‘Credit conditions, macroprudential policy and house prices’, Journal of Housing Economics, Vol 41, and Acharya et al (2022) ‘The anatomy of the transmission of macroprudential policies’, Journal of Finance, Vol. 77, Issue 5. For international evidence, see Richter et al (2019), ‘The cost of macroprudential policy’ Journal of International Economics, Vol. 118, Pogoshyan (2019) ‘How effective is macroprudential policy? Evidence from lending restriction measures in EU countries’, IMF Working Paper, WP/19/45, and Moretti and Riva (2025) ‘The impact of borrower-based measures: an international comparison’ Central Bank of Ireland, Staff Insights. [11] Aikman et al (2021) ‘The macroeconomic channels of macroprudential mortgage measures’, Central Bank of Ireland, Financial Stability Note, 2021, No. 11.[12] See, for example, Gaffney (2019), ‘Mortgage borrowers at the loan-to-income limit’, Central Bank of Ireland, Financial Stability Note, 2019, No. 11.[13] Singh and Yao (2025) ‘The impact of higher LTI ratios: evidence from Ireland’, Central Bank of Ireland, Research Technical Paper, 2025, No. 13.[14] See, for example, BIS (2019) ‘The costs and benefits of bank capital – a review of the literature’, BIS Working Paper, No. 37 and for Irish related research on this topic, see McInerney et al. (forthcoming) ‘Rightsizing bank capital for small, open economies’,  International Journal of Central Banking.[15] Mclearney (2020) ‘Macro-financial linkages in a structural model of the Irish economy’, Central Bank of Ireland, Research Technical Paper, 2020, No 3.[16] See Athanasopoulos et al. (2025), ‘The costs and benefits of borrower based measures – a macroeconomic framework’, Central Bank of Ireland, Research Technical Paper, 2025, No 14 and Banerjee et al. (forthcoming), ‘Income-based tools to mitigate housing market risks: Where might we have been without them?’.[17] See, for example, Furceri and Mourougane (2012) ‘The effect of financial crises on potential output from OECD countries’, Journal of Macroeconomics, vol 34, Chen et al (2019) ‘The Global Economic Recovery 10 Years After the 2008 Financial Crisis’, IMF Working Paper, WP/19/83 and Cecchetti et al. (2009) ‘Financial Crises and Economic Activity” NBER Working Paper, No. w15379.[18] Gunnewig-Monert and Lyons (2024) ‘Housing prices, costs, and policy: The housing supply equation in Ireland since 1970’ , Real Estate Economics, Vol. 52.[19] Yao et al (2025) ‘Mortgage measures and rental yields in Ireland’, Central Bank of Ireland, Staff Insights, No 5.[20] Carro et al. (2022) ‘Heterogeneous effects and spillovers of macroprudential policy in an agent-based model of the UK housing market’ Bank of England Staff Working Paper, No. 976, Castellanos et al. (2024) ‘The aggregate and distributional implications of credit shocks on housing and rental markets’, ECB Working Paper Series, No. 2977, Cima and Kopecky (2024) ‘Housing policy, homeownership and inequality’ TEP Working Paper, No 724.[21] See Central Bank of Ireland (2024) ‘Economic policy issues in the Irish housing market’.[22] BIS CGFS (2023) “Macroprudential policies to mitigate housing market risks – country case study: Ireland,”.

The introduction of the mortgage measures a decade ago has been amongst the most important public policy interventions by the Central Bank, and has played a significant role in strengthening the resilience of borrowers, lenders and the broader economy. The Central Bank has been responsive to the evolving context over the past decade, adjusting the design and calibration of the measures to balance benefits and costs.The environment in which the measures operate is likely to become more challenging over the next decade, but that is also when their benefits are likely to be higher.Deputy Governor of the Central Bank of Ireland Vasileios Madouros delivered the Richard Cantillon lecture at the Dublin Economics Workshop today 19 September 2025.Speaking ahead of the lecture, Deputy Governor Madouros said: “It has now been a decade since the Central Bank introduced the mortgage measures. These have been amongst the most important public policy interventions by the Central Bank, both to avoid damage to the economy as a whole and to protect consumers.“I am very conscious that the measures affect people very directly. Buying a house is the most important financial decision that most people will make in their lives. And mortgages are the largest form of borrowing by households. So the measures matter for individuals, and they matter for the economy as a whole.“I am also very conscious that the benefits of the measures are not directly observable by most people.  Indeed, they stem from the absence of things, like unsustainable booms and busts, over-indebtedness or widespread financial distress. The benefits of the measures are also long-term: they may not be immediately obvious today, but they can become more apparent when shocks hit.” “What we do know, ten years on, is that the mortgage measures have played an important role in strengthening the resilience of borrowers, lenders and the broader economy. It is important not to lose sight of that, especially as we navigate a more shock-prone world.”Weighing benefits and costsDiscussing the Central Bank’s approach to weighing up the benefits and costs of the measures, Deputy Governor Madouros said: “As policymakers, we do not aim for resilience at any cost. That would not serve society well. Like all policy interventions, the mortgage measures entail both benefits and costs from the perspective of the economy as a whole. Our job is to balance these.“Indeed, over the past decade, the mortgage measures have not remained static. We have adjusted them, based on evidence, to balance their benefits and costs, from the perspective of the public good. And we continue to deepen our understanding of their impact, learning from our own experience and the experience of other countries.”Looking aheadCommenting on the future outlook, Deputy Governor Madouros said: “Looking ahead to the next decade, the environment in which the measures operate may well be more challenging than the one that prevailed over the past decade. Memories of the financial crisis are fading, mortgage market activity is likely to increase and house prices are already elevated relative to incomes. This combination of factors has the potential to create the conditions for rising indebtedness, especially if lending standards in the mortgage market were to weaken. “It is precisely in such an environment that the value of the mortgage measures is likely to be higher. Our focus at the Central Bank will be to ensure that the measures continue doing their job into the future, so that dynamics in the mortgage market – which ultimately underpins broader housing activity – remain sustainable over the long term.”ENDSFurther InformationElaine.scanlon@centralbank.ie 087 2136313 

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Warning:Unauthorised Retail Credit FirmUnauthorised Firm NameSeaconview Designated Activity Company (Clone)Websitehttps://seaconviewdesignatedactivitycompany.comPhone Numbers Used+44 2897 032013+353 89 985 5958Email address usedinfo@seaconviewdesignatedactivitycompany.com Authorisation in IrelandSeaconview Designated Activity Company (Clone) is not authorised to provide Retail Credit services in Ireland.Additional InformationThis scam is an example of an ‘advanced fee fraud’, where a payment is sought upfront prior to providing a loan. The loans are never provided.This fraudulent firm has cloned the details (name, address, LEI number and CRO number) of a Central Bank of Ireland authorised firm and has been seeking to pass itself off as the legitimate firm, Seaconview DAC (CBI00144391), in order to deceive Irish consumers. It should be noted that there is no connection whatsoever between the Central Bank authorised firm and this scam entity. Further InformationThis entity shares the telephone numbers with another fraudulent entity that has also purported to offer retail credit  in Ireland without authorisation from the Central Bank of Ireland. The Central Bank of Ireland issued a warning notice  concerning this fraudulent entity:ABR Chesapeake Ireland IV plc (March 2025)Notes:Any person wishing to contact the Central Bank with information regarding such firms / persons may telephone (01) 224 5800.For more information on how to protect yourself from financial scams, please visit www.centralbank.ie/financialscams The name of the above firm is published under section 53 of the Central Bank (Supervision and Enforcement) Act 2013. 

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Modified Domestic Demand (MDD) is revised up for 2025 to 2.9 per cent but growth expected to slow to 2.3 per cent per annum on average in 2026 and 2027.Risks that further geoeconomic fragmentation could result in lower inward investment over time and more immediate challenges to the public finances given the reliance on large corporation tax revenues.Policies to tackle constraints to domestic growth - by closing infrastructure gaps in water, energy, transport, and housing – will also build resilience against the long-term challenges posed by geoeconomic fragmentation. The Central Bank has today (18 September 2025) published its third Quarterly Bulletin of 2025. On the launch of the Quarterly Bulletin, Robert Kelly, Director of Economics and Statistics said:   “As the new trans-Atlantic economic relationship begins, businesses, households and policy-makers in Ireland continue to adapt to the changed environment.  The economic outlook is not as favourable as it would have been had US tariffs not been introduced, but the tariff rates covering EU-US trade are lower than had been expected earlier in the year.  Policy uncertainty still remains relevant both domestically and globally and Irish economic growth is expected to be impacted.”“The strength of headline GDP in the first half of 2025 was partly due to multi-national enterprises responding to potential US tariffs by front-loading exports.  However there was also an underlying impetus to exports arising from the expanding pharmaceutical industry in particular, as well as growth in non-pharma exports.  Looking ahead, the manner in which affected MNEs react to increased costs due to higher tariff and non-tariff barriers will influence key indicators of the Irish economy. Rising production and distribution costs could eventually weigh on the profits of MNEs in Ireland over the medium term, having a negative impact on corporation tax revenues compared to recent trends. Upward revisions to government expenditure combined with an expected slow down in tax revenue growth (excluding excess corporation tax) is expected to result in the underlying budget deficit deteriorating further out to 2027.”“Over the longer term, particularly if tariffs are accompanied by broader changes to US tax and industrial policies, there is a risk of lower investment flows and restructured MNE value chains. This could hinder the growth of economic activity and employment in Ireland, further exacerbating challenges for the public finances.  In a Signed Article  also published today, staff research points towards the prospect of Irish national income being in the region of 1 per cent lower over the long-term with the new US tariff regime now in place.  The potential impact differs across sectors, with models pointing to more negative outcomes for the foreign-dominated pharma and chemicals sectors, while the food and beverage sector is the most significant of the domestically-dominated sectors affected.  The analysis suggests that tariffs of the magnitude now being introduced are unlikely to lead to any significant reduction in existing foreign investment, but the potential loss of Ireland’s attractiveness as an export platform for new US foreign direct investment remains a key risk over the medium term.”The economy is projected to continue to grow despite new tariffs on EU-US trade, more fragmented international trade generally and continued high levels of uncertainty.  Modified Domestic Demand (MDD) grew by 3.8 per cent in the first six months of 2025 compared to the same period of 2024, with employment up 2.8 per cent.  The outturn for the first half of 2025 indicates some positive momentum in economic activity, albeit that some signs of easing are emerging. The private sector job vacancy rate has fallen and growth in economic activity in the domestically-oriented sectors of the economy has been moderate in the first half of 2025. Overall, the positive outturn for the first half of 2025 along with additional government expenditure announced in the Summer Economic Statement has contributed to an upward revision to the MDD forecast for 2025 to 2.9 per cent, with MDD forecast to grow by 2.2 per cent and 2.4 per cent in 2026 and 2027, respectively. Continued expected growth in real disposable incomes over the forecast horizon, amid a stable labour market, supports the forecast for continued growth in consumer spending of over 2 per cent per annum out to 2027.  With employment growth expected to slow to just under 2 per cent, a marginal rise in the unemployment rate is anticipated from its current levels of around 4.5 per cent, yet still remaining below 5 per cent.  Domestic inflationary pressures are forecast to remain contained, although food price inflation has been relatively high lately due mainly to tighter supply conditions in European beef markets.  Food price inflation is forecast to moderate, however, whereas services inflation is expected to stabilise around 2.7 per cent out to 2027 given the strength of domestic demand, leading overall HICP inflation at 1.4 per cent in 2026 and 2027.The outlook for domestic investment has been revised up for 2025 but the overall outlook is muted and forecasts are particularly sensitive to the performance of the MNE-dominated parts of the economy. Modified investment is forecast to grow in 2025 by 2.4 per cent, compared to the small decline of 0.6 per cent projected in QB2. The main reason for the more positive expected outturn in this forecast is revisions to historical investment data published by the CSO in July and more positive high-frequency soft data on business investment activity. Within modified investment the projection for housing completions has been revised downwards for 2026 and 2027 as constraints in water and energy infrastructure are expected to be marginally more binding on the number of dwellings that can be delivered in those years. Housing completions are forecast to stand at 32,500, 36,000 and 40,000 in 2025, 2026 and 2027, respectively. Offsetting weaker projected new housing construction, the forecasts for improvements and non-residential building and construction have been revised up modestly across the forecast horizon. The underlying budget deficit (excluding estimated excess corporation tax) is now projected to be larger out to 2027 when compared with the previous Bulletin, reflecting additional expenditure measures announced by Government. The underlying general government balance (GGB) is estimated to have recorded a deficit of -2.1 per cent of GNI* in 2024. Latest Exchequer data shows growth in income tax and VAT, while remaining robust, has moderated in the first eight months of 2025, while cumulative corporation tax (CT) receipts are only marginally above the level for the same period last year (excluding receipts linked to the Apple State aid case). Gross voted expenditure has recorded strong growth so far this year, and the expenditure ceiling for 2025 has been revised upwards reflecting additional current and capital spending. As a result, the outlook for government expenditure growth for 2025 has been revised sharply upwards and an underlying deficit of -3.3 per cent is now anticipated for this year.  Over the coming years, spending growth is expected to remain elevated, particularly capital spending, while estimates of underlying revenue growth moderate in-line with overall economic activity.  As a result, the underlying GGB is projected to deteriorate further to -3.7 per cent of GNI* by 2027.The threat of a further escalation of global trade tensions persists and means that risks to the current forecasts for economic growth are tilted to the downside.  Delays in alleviating key infrastructural deficits in water, energy and housing would worsen capacity constraints that are already having a negative impact on economic activity, further limiting the growth potential of the economy and possibly putting upward pressure on inflation.  Risks to the public finances are firmly to the downside owing to the vulnerability of government revenue to a loss of corporation tax and the pattern of persistent overruns in public expenditure.Addressing the long-term challenges posed by geoeconomic fragmentation requires tackling the same constraints to domestic growth - by closing infrastructure gaps in water, energy, transport, and housing. This is essential to improve Ireland’s attractiveness for foreign direct investment and to contain the costs of living and doing business. Efficient public infrastructure delivery, achieved not only through increased capital expenditure but also reforms that would accelerate project timelines, can crowd-in private investment. However, the necessary rise in construction activity—a sector with below-average productivity—poses short-term risks of higher unit labour costs and inflation. To mitigate these risks, linking public capital spending to innovative delivery methods and incentivising scale in investment projects is crucial. Such initiatives can support productivity, ease inflationary pressures, and maximise the economic benefit from public investment.  More generally, facilitating greater business dynamism and more efficiency in capital re-allocation as young firms emerge will also contribute to higher productivity growth.Reducing the risks to the public finances from an excessively narrow tax base has become more critical, given the reliance on corporation tax receipts from a small number of MNEs, which may be more vulnerable in light of geoeconomic fragmentation. Committing to a credible fiscal anchor that ensures sustainable growth in net government expenditure remains essential. This would establish effective counter-cyclical fiscal policy, enabling the public finances to support the economy as needed, and strengthen the public finances over time. Growth in government expenditure, especially recurring current expenditure, needs to be accompanied by a sustainable revenue-raising base given the vulnerabilities arising from persistent spending overruns and underlying budget deficits.  Additionally, broadening the tax base is necessary to create the fiscal and economic capacity to increase public capital investment as envisaged in the National Development Plan and to cover the rising costs that are emerging to sustain public services at their existing levels.Previous Quarterly Bulletins are available to view on the Central Bank’s website.Further informationMedia Relations: media@centralbank.ie Úna Quinn: una.quinn@centralbank.ie / 086 067 4008Elaine Scanlon: elaine.scanlon@centralbank.ie / 087 213 6313

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The Central Bank of Ireland has today (12 September 2025) launched silver and gold proof collector coins to commemorate 250 years since the birth of Daniel O’Connell, one of the greatest figures of Irish history. The coins recognise Daniel O’Connell’s remarkable life and legacy, a legacy that continues to resonate in Ireland and across the world. Designed by Michael Guilfoyle, the coins feature a portrait of Daniel O’Connell with the inscription of ‘The Liberator’. The coins will go on sale today at 12:30pm from www.collectorcoins.ie. The silver proof coin has an issuance limit of 3,000 and retails at €65. It is struck in 28.28g sterling silver.  The gold proof coin has an issuance limit of 750 and retails at €995. It is 1/4 troy ounce gold. A double set – containing the two coins – has an issuance limit of 250 and retails at €1,095. Launching the coins during a ceremony today in Derrynane House in Kerry – the ancestral home of Daniel O’Connell – Governor Gabriel Makhlouf said: “The coin that we are launching today tells a story of the power of peaceful, democratic action and the enduring struggle for social equality. Daniel O’Connell emerged as a transformative figure through his tireless campaigning for equality and fair representation. O’Connell understood that economic empowerment and political rights were deeply intertwined, and he dedicated his life to breaking down the barriers that held so many back.  It is fitting, therefore, that we honour his legacy today with this coin, a symbol of value, exchange, and progress. “The economic outlook during O’Connell’s time was one of stark contrasts. While a small cohort of people enjoyed the privileges of land ownership and economic power, the majority of the population struggled. O’Connell understood that economic justice was inseparable from political rights. He believed that full participation in society – whether through voting, owning property, or earning a fair wage – was essential to achieving equality. He created one of the first mass democratic political movements that the world had ever seen and his efforts laid the groundwork for many of the social and economic reforms that would follow in the years after his death.“Coins are not just instruments of commerce; they represent a shared social contract. The coins we use today are symbols not only of economic value but also of the shared values that unite us as a community. O’Connell understood the value of community and the importance of social equality, justice and peaceful reform, values which continue to resonate today.”   ENDSNotes to the EditorProof coins are collectable coins and are not intended for general circulation. They are minted using specially polished dies and blanks that give them a mirror-like finish. Every year the Central Bank issues a number of collector coin products, on behalf of the Minister for Finance. The Collector Coin Advisory Group advises the Bank in relation to coin themes. The Central Bank invites public submissions in relation to themes. Pictures Picture of the coin attached. Arthur Ellis Photography will syndicate pictures from the coin launch.Further informationMartin Grant, martin.grant@centralbank.ie, 086 078 7868

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