may emerge in the consultation. we want to shorten the period of uncertainty as much as possible. accordingly, after making any appropriate refinements ( for example, in relation to first time buyers, and to the potential future use of private mortgage insurance as floated in the consultation paper ), we will move quickly to confirm the parameters of the standing regime. almost all of the discussions that i have participated in at this committee over the past few years have naturally focused on the banks, but of course this is only one element of the central bank ’ s mandate and it is worth reminding that almost 9 out of 10 staff of the central bank are actually engaged in numerous tasks other than the prudential supervision of banks. ( there are, of course, other aspects of banking oversight that staff deals with, such as the consumer protection and conduct of business aspects of bank regulation ). indeed, the microprudential banking supervisory decision making now largely passes under the control of the eu single supervisory mechanism ( ssm ), which came into operation on november 4. the ssm does not, however, mean less work for us, but rather more work, inasmuch as the procedures of the ssm require a further expansion of our bank supervisory staff as well as a reorganisation of their function. indeed, after three years during which staffing levels have not risen, the central bank now needs to increase staff numbers again, not just because of ssm, but also because of the additional complexity of new international regulations covering non - bank financial services ( which form the heart of the ifsc ), new rules on bank resolution and other new mandates. ( much of the costs here are recovered from the industry ; indeed all regulatory costs could be so recovered, instead of having the effect of eating into the central bank ’ s surplus income to be transferred to the exchequer ; and the central bank has suggested this to successive governments. ) having already absorbed a sizable increase in staffing during 2010 – 11, we are currently engaged in an extensive review of our internal organisation to ensure the conditions for steady improvements in the effectiveness of our work, which relates to essential matters which, especially when they work well, are not obviously visible to the general public. the review is examining a range of issues including internal structures, career paths and internal processes. i expect significant beneficial changes to both organisational structures and practices within the central bank as a result of the review. our effectiveness will be enhanced by our carefully designed and efficient headquarters building at

in ireland to result in any substantial inroads on rates. what is the role of the central bank in the area of mortgage interest rates? from the prudential point of view, we could have a role in seeking to ensure that banks set rates on new business sufficiently high to cover the risks of future default. while the current spreads would not have been sufficient to compensate the banks for the risks they actually took in the boom, much of which still embedded in the existing stock of mortgages, i think it would be hard to argue that mortgage underwriting today was so bad as to require such a high margin on new business. inevitably, though, constrained by their inability to restore spreads on trackers, the banks have sought all means to restore their profitability including the widening of standard variable rate spreads, which typically apply to old as well as new business. as in most advanced economies, in ireland it has long been understood that tight administrative control over the rates charged by banks would be counterproductive in ensuring a sufficient flow of properly priced credit on a lasting basis. for one thing, such control would strongly discourage new entrants. therefore, while interest rate spreads are now high, since national credit policy is crafted with the welfare of the people as a whole being the “ constant and predominant aim ”, i see no sufficient basis for altering this view. bis central bankers ’ speeches there has been much discussion of the central bank ’ s consultation paper on macroprudential instruments, the limits being proposed on high loan - to - value and loan - to - income mortgages. the consultation period ends on december 8 and we hope to be able to announce a finalised set of regulations soon after that date, depending on the complexity of the responses received. it may be asked whether the central bank thinks that recent property market developments represent a bubble. that is not specifically the driver of these proposals. instead, what we want to achieve by these measures is to have in place a standing regime which ensures that a credit - driven bubble does not take hold, and that a new generation does not become over indebted. absent such a regime, sharp price rises in dublin – and they jumped by 42 per cent in just 18 months – in a thin market, not yet eliciting a sufficient supply response, could sow the seeds of trouble for the future. our approach seeks to draw on ongoing research being carried out at the central bank, on international experience, and of course on matters which