Sharon Donnery: Opening remarks at the central bank conference

Opening remarks (virtual) by Ms Sharon Donnery, Deputy Governor of the Central Bank of Ireland, at the Central Bank Conference to inform the 2021-2022 mortgage measures framework review, 26 April 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
26 April 2022

Ladies and gentlemen,

It is a pleasure to welcome you to our virtual event. I would like to extend a particularly warm welcome to all of our external participants. Tá fáilte romhaibh go léir go dtí Banc Ceannais na hEireann. Thank you all for sharing your valuable time with us over the course of this afternoon and tomorrow.Our capacity to make policy is greatly enhanced by your willingness to share your experience and your expertise. Our recent strategy emphasised our aim to be open and engaged, by listening to our stakeholders, building dialogue and learning, we can strengthen our policy frameworks.

We are hosting this conference at a key juncture in our mortgage measures framework review. Last summer, we engaged with and listened to the views of the public, as well as key stakeholder and representative groups from across industry and civil society. We gathered their perspectives on our policies through a series of roundtable style events and an online survey. This elicited the largest response ever to a Central Bank survey. Throughout the autumn we analysed the feedback gathered through this engagement, and complemented it with extensive in-house analysis, culminating in a public consultation which launched in December 2021.3 That consultation closed in late March 2022, with submissions from a wide cross-section of organisations with an interest in our measures, and the functioning of the housing market more widely. The feedback we have received from these engagements has been useful in ensuring we understand the different perspectives others may have. As we make decisions, which will be evidence-based and grounded in data and research, we will ensure the mortgage measures continue to meet their goals.

This conference acts to complement the "bottom up" analysis and information gathering exercise we have been conducting up to now. I believe we can benefit greatly from engaging with academia, and policymakers and researchers from other institutions. Today, we will hear from three of the world's leading macro-financial researchers, Professor David Aikman, Professor Atif Mian, and Professor Moritz Schularick. Between them and their set of co-authors, they have been at the forefront of building the post-2008 knowledge base on the damaging role that debt build-ups, and those relating to household debt in particular, can have on the economy at large. This includes not only the direct build-up of risk on borrower and bank balance sheets, but the role that indebtedness plays in creating a wide range of harmful macroeconomic imbalances that damage medium-term prosperity. The work of David, Atif and Moritz provides a powerful underpinning for the macroprudential policy frameworks that have been developed rapidly over the past decade.