The Financial Regulator conducts regular on-site inspections and monitors banks’ exposures on a regular basis. Against the backdrop of the growth in mortgage lending, the Financial Regulator has introduced changes to the risk weighting applied by banks to Irish residential mortgages which will result in credit institutions setting aside additional capital in respect of these loans.
Further changes to risk weighting may be introduced in the area of both residential and commercial property lending as part of the national discretions available under the forthcoming Capital Requirements Directive. At present, the Financial Regulator is consulting with the financial institutions on this important matter.