The financial regulator has confirmed it will review up its 'stress test' on mortgages in response to new products in the market.
At the moment the regulator's stress test is two percentage points, so this means that lenders' assessment procedures take account of the possible impact of interest rates increasing by this amount.
The regulator said that its review was initiated in response to 'new products and other developments' in the market, but that media reports that said the stress test would go up to 3 percentage points are wrong.
'While no final conclusion has been reached on revising the guidance, it does not represent a shift or major change in policy and it is incorrect to suggest that that we will increase our guidance by another 1% above the prevailing standard variable interest rate', the regulator said.
The financial regulator has come in for criticism over slowness and excessive caution in a report from a consultative committee set up to monitor its performance.
The consumer panel, which is chaired by consumer advocate Brendan Burgess, has hit out over the regulator's failure to take on board its suggestion that an analysis of bank overcharging be provided.
Speaking on RTE radio this morning Mr Burgess said last year the regulator revealed that it forced banks to refund €118m to customers who were overcharged.
However, the suggestion from the panel that the overcharging be analysed was rejected.
He said that the panel has made suggestions that were subsequently taken up in the past, so they do have some influence
Mr Burgess said the performance of the regulator in dealing with some issues had improved.
