gabriel makhlouf : remarks on the mortgage measures framework review opening remarks by mr gabriel makhlouf, governor of the central bank of ireland, to the central bank listens event for the mortgage measures framework review, 15 july 2021. * * * welcome to the central bank of ireland, albeit virtually. i am delighted to welcome you to today ’ s central bank listens event. it is one of three listens events taking place this month focusing on the central bank ’ s mortgage measures. in 2015, the central bank introduced a set of measures to help guard against excessively loose lending standards in the mortgage market. while not always understood as such, the measures are essential to our mission to serve the public by maintaining monetary and financial stability and ensuring that the financial system operates in the best interests of consumers and the wider economy. we know that borrowers with high levels of debt relative to their income or to the value of their house are more likely to face financial difficulties in challenging economic times. by focusing on lending standards, the mortgage measures help to guard against a credit - fuelled house price boom like the one we saw in the 2000s re - emerging in the future. we review the effectiveness of the mortgage measures every year against their stated objectives. as part of that regular review, we look at the calibration of the measures and take into account wider housing and mortgage market developments. several changes to the calibration and functioning of the mortgage measures have taken place over the years because of these annual reviews. however, we ’ ve organised today ’ s event as part of our review of the overarching framework for the mortgage measures. you may be curious to know what exactly a framework review is and why are we conducting one now. as the mortgage measures are a permanent feature of the market, it is important that we not only do the annual review, but that we also consider the effectiveness of the overarching framework. this is good policy practice and i personally am not a believer in “ set and forget ” policy making, even if the policies have been effective. the framework review will take place throughout this year and next, alongside the regular annual reviews. it is now approaching seven years since the mortgage measures were first introduced. the environment in which we operate evolves constantly so it is important that our overall policy framework remains fit for purpose, whether that is the precise tools that we use, our strategy for how the measures operate in a changing environment, how we balance the benefits

the data to make appropriately informed decisions. the ability to collect large volumes of data also poses questions of how that data is processed and used. eiopa has identified possible price discrimination issues in its response to the european commission ’ s public consultation on fintech11 and us regulators12 have spent time considering " price optimization " tools, which determine the premium to be charged to policyholders. the central bank does not have a role in the setting of premiums. in fact, all supervisory authorities in the eu are explicitly prohibited by european law from doing so. however, we do have a role from both a conduct and prudential perspective in considering how this data is used, in both the interests of the firm and its shareholders, and its customers. it risk as the digital transformation continues in the insurance industry, information technology risks increase, both in terms of probability and impact. the insurance industry holds particularly sensitive personal data and there is a history of cyber attacks against insurance firms. the central bank continues to build and enhance its approach to it risks to enable the assessment and challenge of the effectiveness of regulated firms ’ mitigation of these risks. a year ago, we published cross industry guidance on it and cybersecurity risks 13. this set out in relatively straightforward terms, our minimum expectations of firms, of all types, and in particular of their boards and senior management when it comes to addressing it and cyber risk. we have required assurance from external auditors of high impact insurance firms, regarding their governance of cyber security risk and issued questionnaires to other insurance firms to gain sectoral insights. we now have a dedicated it risk inspection team that will cover all sectors in 2018. while this is still a relatively small team - particularly compared to the resources applied by regulated firms we are still identifying material issues in too many firms. the evidence from our increasingly intrusive it risk supervision indicates that neither the it 5 / 7 bis central bankers'speeches investment nor the governance and control arrangements are adequate to satisfactorily mitigate these risks, and to be truly prepared to meet the challenges of technology and business model change associated with insurtech & innovation. conclusion i will conclude here. the insurance industry plays a critical role in the irish financial services industry and for the economy and its citizens. the intensity and intrusiveness of our approach to supervision of the sector will continue to reflect this importance. we will continue to ensure that we are both operating to and influencing european norms of supervision,