Official: 'Banks are starting to forget hurt caused by financial crisis'

A senior Central Bank official has warned that some banks are starting to forget the hurt caused during the financial crisis.

Official: 'Banks are starting to forget hurt caused by financial crisis'

A senior Central Bank official has warned that some banks are starting to forget the hurt caused during the financial crisis.

Bank officials have been warned against 'hubris' as they call for changes to mortgage lending rules.

The Central Bank believes the rules should stay as they are and changes are not the solution to the housing crisis.

Deputy Governor Ed Sibley said the mistakes of the past need to be remembered: "There have been isolated incidents, not just in banking, where there seems to be the memories of the crisis and how deep it has been and how hurtful it has been to the people of Ireland are starting to fade a little."

Meanwhile, the Central Bank Governor has promised to continue to be 'annoying' for banks, following comments from the KBC group that the Central Bank's "annoying" investigation into the tracker mortgage scandal was hampering growth.

The Central Bank said changes to mortgage lending rules is not the answer to the housing crisis.

There have been calls to loosen the rules that mean people can borrow a maximum of 3.5 times their annual income.

The Central Bank estimates that house prices would be 15 to 25% higher without the restrictions.

Governor Mahklouf said the mortgage measures are working: "We recognise that significant challenges remain for people and families looking to purchase homes.

"Demand continues to outstrip supply, there are issues in the mortgage market, the rental market, and the market for social housing.

"However, increasing household debt is not a substitute for increasing the supply of housing."

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