Are capital requirements for Irish banks too high?

In the aftermath of the financial crash of 2008, the European debt crisis, and the Irish banking crisis, in 2014 regulations were passed aimed at promoting higher banking standards to prevent similar crises in the future.

The first of these rules states that all Irish banks have initial starting capital of at least €5 million; they must always be in excess of this amount. Further, lenders have claimed that they must hold up to three times the capital for mortgages relative to average requirements throughout the rest of the EU.

These regulations largely seem to have accomplished the job they were instated, with the Banking and Payments Federation Ireland (BPFI) stating that there has been an increase in high quality loans and a corresponding decrease in problem loans.

However, there has been criticism as of late for the continued implementation of these rules, and for the harsh conditions they impose on lenders. It is possible that borrowers are also adversely affected by extension. For instance, it is claimed by major Irish banks that the high capital requirements are …

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Mortgages on the rise

A sense of impending doom has been a huge part of economic and political decisions within the last few months due to the ever uncertain Brexit debacle. These feelings are slowly beginning to fade in Ireland due to the increased time that Irish businesses and banks have had to prepare for the EU split. Although this event is bound to cause slight fluctuations, economists have noted that the economic future for Ireland is still bright. 

Banks and buyers alike are taking note of this promise, which has been obvious through the most recent data in relation to mortgage approvals and house prices. According to recent bank data, there has been a  significant rise in the number of home related mortgage applications and acceptances. 

The Irish Bank and Payment Federation found that from April to June, there were 10,157 mortgages taken out, which is an 8.8pc rise from the previous period. Using yearly comparisons, it has been shown that the issued mortgage rate this time last year was around 800 acceptances lower. It topped the approvals for the first three months …

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