However, the changing nature of financial intermediation also raises the potential that new vulnerabilities could emerge, so it is important that we adapt the macroprudential framework accordingly – and in line our aforementioned regulatory principles of being forward-looking, connected, proportionate, predictable, transparent and agile. These measure we are announcing today are designed to build the resilience of this growing form of financing to shocks.
Central Bank analysis has identified excessive leverage and liquidity mismatch as potential sources of vulnerability in Irish property funds. Following extensive engagement, consultation and analysis, we are now introducing measures to address these vulnerabilities. For the leverage limit, we are introducing a sixty per cent limit on the ratio of property funds' total debt to total assets.