The main risks facing the Irish financial system are external, these include a disorderly Brexit, changes to global tax policy and the risk of an escalation of trade wars.
This is according to the Central Bank of Ireland which yesterday published the second Financial Stability Review (FSR) of 2019.
The FSR outlines key risks facing the financial system and the Central Bank assessment of the resilience of the economy and financial system to adverse shocks.
Domestically, the report indicates that an economy close to capacity and continued lending growth points to a gradual build-up of cyclical systemic risk. Overall, the Central Bank believes the banking system is now better able to absorb – rather than amplify – shocks, but profitability challenges have become more acute.
The Central Bank of ireland judge that the mortgage measures – as currently designed and calibrated – continue to meet their objectives. There will be no change in loan-to-income (LTI) and the maximum amount that the lender will consider loaning as a percentage of the value of the property (LTV limits) or the allowances for 2020.