Central Bank of Ireland: Financial Stability Notes

The Central Bank of Ireland has today published its first Financial Stability Note. This new series will cover financial stability related topics including those relating to risks and vulnerabilities facing the Irish and European financial system.

 

The Note, ‘Macroprudential Measures and Irish Mortgage Lending: An Overview of 2017’, by Christina Kinghan, Paul Lyons and Elena Mazza, provides an overview of new residential mortgage lending in Ireland in 2017. It describes key loan and borrower characteristics of loans subject to the Central Bank’s Mortgage Measures along with a comparison to lending in 2016. The Note also provides details on loans with an allowance to exceed the loan-to-value (LTV) and loan-to-income (LTI) limits, as permitted under the Measures. 35, 472 new loans are examined, with a value of €7.4 billion.

 

The key findings of today’s Financial Stability Note are:

 

  • First-time-buyers (FTBs) in 2017 had an average LTV of 79.8% and an average LTI of 3 times gross income. This represents a marginal increase on the average LTV and LTI ratios reported in 2016. FTBs also had a larger loan size, property value and income compared to FTBs one year earlier (see Table 4).
  • The average loan size and property value of second and subsequent buyers (SSBs) also increased compared to 2016. The average LTV for SSBs in 2017 was 67.6% and the average LTI was 2.6 times gross income (see Table 5).
  • A higher proportion of loans for both FTBs and SSBs were originated on a fixed interest rate compared with one year earlier.
  • 17% of the aggregate value of SSB lending exceeded the SSB LTV limit.
  • 18% of new primary dwelling home (PDH) lending exceeded the 3.5 LTI cap. This corresponds to 25% of the value of FTB lending and 10% of the value of SSB lending. A larger share of LTI allowances was accounted for by FTBs (74%) relative to SSBs (26%).
  • Allowances to exceed the LTI and LTV caps were allocated to borrowers in all four quarters of 2017 (see Table 7).

Irish Postgraduate and Early Career Economics Workshop

See below for the programme for the return of the Irish postgraduate and early career economics workshop (previously “ISNE conference”). All are welcome to attend. Thanks to School of Economics in UCD for providing financial support.

Irish Postgraduate Early Career Economics Conference

UCD Geary Institute

Friday May 4th

9am to 915am: Opening Remarks: Professor Liam Delaney (UCD), Dr. Lisa Ryan (UCD), Dr. Ben Elsner (UCD), Dr. Michelle Queally

Session 1a: 915am to 1045am Session 1b: 915am to 1045am
Sanghamatira Mukrhrejee (UCD) “Factors influencing early electric vehicle adoption in Ireland”. Aine Doran (QUB) “Population Dynamics in 19th century Ireland”.
Bryan Coyne (TCD) “The impact of a subsidised weatherisation scheme on Irish domestic energy consumption”. Gayana Vardanyan (TCD) “The long-run impact of historical shocks on the decision to migrate: evidence from the Irish Famine”.
Martin Murphy (ESRI) “Predicting farm’s non-compliance with regulations on emissions of nitrates”. Man Wing (Lorraine) Wong (UCD) “The effect of language proximity on the labour market outcomes of the asylum population in Switzerland”.
10.45am  to 11am Coffee
Session 2a: 11am to 1230pm Session 2b: 11am to 1230pm
Florian Gerth (CBOI) “Entry and Exit Dynamics of UK firms in the wake of the Global Financial Crisis”.

Patrick McHale, BA  (NUIG) & Thomas Plunkett, B.Pharm (NUIG) “Healthy Eating Meal Plan Preferences Amongst a University Population: A DCE Approach”

Tammana Adhikari (UCD) “Deals versus Rules?”. Kenneth Devine (UCD) “Mortgage Choice and Expectations”.
David Jordan (QUB) “Doomed to decline?: Interwar industrial performance and policy in Northern Ireland”. Ivan Petrov (UCD) “Information Asymmetry, Split Incentives, and Energy Efficiency in the Residential Rental Market”.
1245pm to 130pm Lunch
Session 3a: 130pm to 3pm Session 3b: 130pm to 3pm
Dora Tuda (TCD) “Does higher unemployment increase income inequality: evidence from European labour markets using a discrete choice experiment”. Iordanis Parikoglou (UCD/Teagasc). “The impact of innovation on farm level productivity: evidence from the Irish dairy sector”.
TBC Stefano Ceolotto (TCD). “The impact of moral licensing on pro-environmental behaviours”.
Philip Carthy (ESRI) “Is employment growth affected by the introduction of broadband services?: Evidence from Ireland”. Linda Mastrandrea (UCD) “Linking retail pricing policy with the decarbonisation of the electricity sector”.
Coffee 3pm to 315pm
Session 4a: 315pm to 445pm Session 4b: 3pm to 445pm
Deirdre Coy (UCD) “Health formation in an RCT Early Childhood Visiting Programme”. Eoin Corrigan (UCD) “Capricious Redistribution: The Scale and Impacts of the Local Authority Rent Subsidy”.
Anne Devlin (QUB) “Why is work-limiting disability in Northern Ireland so high?”. Stephen Byrne (CBOI) “Solving the wage puzzle: Does the ‘nonemployment rate’ explain wage dynamics?”.

 

 

 

41st Annual DEW Economic Policy Conference

The Dublin Economics Workshop (DEW) is holding its 41st annual Economic Policy Conference in the Clayton White’s Hotel in Wexford on 14/15 September 2018.

At this stage, the DEW is inviting submissions on the following six topics:

  1. All-island economy
  2. Transport & infrastructure
  3. Higher education
  4. Diversity
  5. Behavioural economics – application to policy
  6. Housing supply

All speakers will be asked to present for 15 minutes each. While a paper is not mandatory, it is preferred. If you would like to submit, please send a short abstract (c.300 words) to sarah@dublineconomics.com by 5pm on Friday 11th May.

 

Revenue Annual Report 2017 and New Research

This morning Revenue published our Annual Report for 2017. The report contains lots of information on Revenue’s activities and outputs last year that contributed to the collection of €50.8 billion in net receipts for the Exchequer, as well as delivering on service to support compliance, the implementation of customs controls and facilitation of trade.

Also published today are a series of research papers that may interest readers of this blog:

Updated Corporation Tax research profiles tax payments received in 2017 as well as analysis of 2016 tax returns. This includes significant new analysis of multinational companies in Ireland.

An analysis of Income Dynamics and Mobility based on Revenue micro data. This examines the distribution of incomes by decile and percentile as well as tracking mobility of income earners over time.

Profiles of Excise Duty and Capital Taxes receipts. Excise, Capital Acquisitions Tax , Stamp Duty, Capital Gains Tax and Local Property Tax cover wide ranging activities, transactions and products. The profiles document these in detail and show changes in core components in recent years.  For the first time, information on capital taxes are combined together with location and earnings data to present new perspectives on the taxes.

Revenue’s latest customer survey, of small to medium sized enterprises in 2017, is Revenue’s fourth SME survey. Responses show that customer satisfaction with Revenue service remains high across a range of headings. The survey also includes a behavioural experiment to test the impact of personalisation on response rates.

Also published is the annual illegal tobacco survey results for 2017 and the first quarterly Local Property Tax statistics for 2018.

 

Bringing the Household Back in: Comparative Capitalism and the Politics of Housing Markets

Some readers might be interested in this new working paper at UCD’s Geary Institute. http://www.ucd.ie/geary/static/publications/workingpapers/gearywp201807.pdf

The core argument is that to understand heterogeneity in house price inflation, it is vital to understand the interactive dynamics in two markets that determine homeownership: First, the labor market, which shapes households’ incomes and; second, the market for mortgages, which shape households’ access to credit financial resources.

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