Vasileios Madouros: The macroprudential mortgage measures ten years on - taking stock

Text of the Cantillon Lecture by Mr Vasileios Madouros, Deputy Governor of the Central Bank of Ireland, at the 48th Dublin Economics Workshop, Dublin, 19 September 2025.

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

Twenty 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".

The 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. 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.