mid - 1990s to being more than double that average a decade later ( chart 2 ). at this point, the share of construction output in gdp had also doubled in a decade, rising to around 10 per cent, while construction jobs accounted for more than one - eighth of total employment. despite the remarkable increase in supply, however, ireland also experienced an exceptionally strong boom in house prices ( chart 2 ), reflecting the fact that demand, at that time, was significantly outstripping even the considerable growth in supply. in nominal terms, house prices increased by over 300 per cent in the decade between 1996 and 2006, with average annual growth in the region of 15 per cent over the period. irish house price inflation over these years far outstripped that of any other advanced economy, with the rise in house prices across a selection of other oecd countries for which data is available, averaging around 6 per cent over the same period. there were both fundamental and other, less comforting, reasons why irish house prices grew so strongly during this period. strong growth in per capita real disposable incomes and favourable demographic and household formation trends, boosted by sizeable net immigration, underpinned some of the increase in demand. however, worryingly, the rise in even basic valuation measures, such as the ratio of house prices to disposable incomes, was considerable. there were also other influences at work. the interest rate convergence process as a result of the move to emu brought about a sharp fall in nominal short - term interest rates, with ex - post real interest rates further impacted by the higher rates of irish inflation relative to the euro area. also, there were significant incentives at the micro level, in terms of favourable tax treatment, which also served to stimulate the demand for property. for this greatly increased demand for housing and other forms of property to be satisfied, however, finance had to be provided – and it was, and in extremely large amounts. while banks had not been central to the financing of the export - led celtic tiger period, which was income - led rather than credit - led, they were central to developments in the housing and property markets from 2003 onwards. stimulated by financial market liberalisation and increased competition in banking, as a result of the entry of some foreign banks into the irish market, competition in the mortgage market intensified. this led to a significant easing of loan conditions, such as maximum loan - to - value ratios and the rigour of creditworthiness assessments

be fundamental changes to the global financial architecture and institutions that govern it. this will pose a greater challenge to developing countries that are already resource constrained and yet need to quickly embrace these changes. again, partners such as first initiative will be called upon to quickly deploy technical assistance to client countries. targeted technical assistance in the financial sector will support governments ’ effort to deepen a market based economy which contributes to a sustainable fiscal position and improved allocation of resources. broad - based financial and legal sector reforms will directly contribute to improving equity and reducing poverty through expanding access to financial services. poverty is sustained by exclusion in the market. the poor benefit from financial services by providing a safe haven for their savings. the route to savings together with investment opportunities that promise returns is the road to enhance poverty reduction. these objectives will be achieved through provision of technical expertise and building capacity to implement our countries ’ financial sector and legal sector reforms whenever required. i therefore look forward to the output of today ’ s discussions that should enable first to meet and exceed the monumental expectations from client countries in its second phase of operations. on that note, it is my honour and pleasure to declare the first consultative group meeting officially open and to wish you fruitful deliberations. thank you.