Deputy Governor Cyril Roux, speaks about the future of macro-prudential policy at the European Commission

• International collaboration and coordination help the development and conduct of macro-prudential policy
• National authorities are best placed to calibrate mortgage-based measures
• Central Bank of Ireland contributes to the development of macro-prudential regulation of investment funds, asset managers and financial markets

In a public hearing at the European Commission on the review of the macro-prudential framework, Deputy Governor (Financial Regulation), Cyril Roux, reflected on the development of macro-prudential policy to date and also looked at how it may develop over the coming years.

He said that “the introduction of harmonised macro-prudential tools across Europe through the CRDIV/CRR and EMIR, among other pieces of regulation, has played a key role in the development of macro-prudential policy across Europe”. He highlighted the coordination, knowledge sharing, and common understanding of the objectives and instruments of macro-prudential policy which occurs at the European Systemic Risk Board as “useful in developing a coherent framework in European countries”.

He went on to say that the Central Bank of Ireland supports the use of appropriate macro-prudential regulation of investment funds, asset managers and financial markets in order to protect financial stability, while calling for further analysis of available data at international level. That is why the Central Bank has actively contributed to the work of systemic risk analysis for the non-bank sector and the development of macro-prudential tools both in Europe and internationally.

However, in relation to mortgage market measures, Deputy Governor Roux stated that the Central Bank agrees with the caution exercised by the European Commission in its consultation paper. He said that "housing cycles, structural features of housing markets and institutional factors vary significantly across Member States. Given the national specificities at play for the calibration of measures affecting mortgage borrowers, such calibration is best decided at national level.”