Hong Kong, May 25, 2016 -- While addressing concerns revolving around high-loan rates, Lane said that lowering rates is not prudent as it will stop potential investors from entering the Irish market. Curtailing rates will harm the Irish economy because the banks will have to focus on “safe” customers.

While speaking to a group of reporters in Dame Street at the publication of Central Bank's 2015 annual report, Lane also stated that lowering mortgage rates would only treat the symptom of the disease and not the disease itself.

The good part is that the Central Bank of Ireland has registered a net profit of 2.24 billion Euro in the current financial year. A part of this profit, 1.79 billion Euro has been transferred as dividend to the exchequer.

Professor Lane said that income gained from sovereign bonds contributed in a major way to the profit.

A large portion of this profit came from money that came in the form of interest payments on retained bonds as well as capital gains received from the 2 billion Euro in bonds which were sold to the National Treasury Management Agency.

The Bank of Ireland is selling bonds far quicker than the minimum schedule as agreed with Europe's Central Bank. However, Prof Lane said that the speed with which the bank will sell bonds in future will depend entirely on the condition of the market.

Bank officials have given an indication that in November this year, the bank will publish the first review of mortgage caps. Prof Lane said that the general framework of the bank will not be affected by the review.

When asked if the mortgage caps are contributing to housing supply constraints, Prof Lane said that in any economy, multiple and conflicting forces are always at play and that these forces affect both supply and demand. He added that an increase in housing demand, if not met with an efficient supply response, would not help.

Gary Chambers, Chief Investment Officer at Fidea Wealth Management, echoes the sentiments of Prof. Lane, "Though the Irish market has been performing well, if it wants to emerge completely from under the shadow of its past crash, fiscal discipline must be practised by both individuals as well as corporate entities. It is quite true that Ireland is expected to see growth in this as well as the coming year, but there are still risks which cannot be ignored."

Contact:
Kazuko Rei
Fidea Wealth Management
Tokyo, Japan
+81-374889163
[email protected]
http://www.fideagroup.com