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Ireland; Financial Sector Assessment Program: Technical Note-Nonbank Sector Stability Analyses

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  • International Monetary Fund

Abstract

This Technical Note discusses the findings and recommendations made in the Financial Sector Assessment Program for Ireland in the areas of nonbank sector stability. Both nonparametric and parametric methods suggest that the residential real estate market in Ireland is close to or moderately below its equilibrium level. Two standard metrics of price-to-income and price-to-rent ratios show that following a protracted period of overvaluation prior to the crisis and a correction afterward, the market has been close to its equilibrium level in recent quarters. Households have deleveraged, but are still highly indebted. The stability analysis results also suggest that vulnerabilities among nonfinancial firms have moderated in recent years.

Suggested Citation

  • International Monetary Fund, 2016. "Ireland; Financial Sector Assessment Program: Technical Note-Nonbank Sector Stability Analyses," IMF Staff Country Reports 16/317, International Monetary Fund.
  • Handle: RePEc:imf:imfscr:16/317
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    References listed on IDEAS

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    1. Kelly, Robert & O’Malley, Terence, 2016. "The good, the bad and the impaired: A credit risk model of the Irish mortgage market," Journal of Financial Stability, Elsevier, vol. 22(C), pages 1-9.
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    3. Cussen, Mary & O'Leary, Brídín, 2013. "Why are Irish Non-Financial Corporations so Indebted?," Quarterly Bulletin Articles, Central Bank of Ireland, pages 104-118, January.
    4. McCann, Fergal, 2014. "Profiling the indebtedness of Irish SMEs," Economic Letters 03/EL/14, Central Bank of Ireland.
    5. Gaffney, Edward & Kelly, Robert & McCann, Fergal, 2014. "A transitions-based framework for estimating expected credit losses," Research Technical Papers 16/RT/14, Central Bank of Ireland.
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    7. Hallissey, Niamh & Kelly, Robert & O'Malley, Terry, 2014. "Macro-prudential Tools and Credit Risk of Property Lending at Irish banks," Economic Letters 10/EL/14, Central Bank of Ireland.
    8. Cussen, Mary, 2015. "New Insights from the Enhancements to Quarterly Financial Accounts," Quarterly Bulletin Articles, Central Bank of Ireland, pages 91-101, April.
    9. Duffy, David & Byrne, David & FitzGerald, John, 2014. "Alternative Scenarios for New Household Formation in Ireland," Quarterly Economic Commentary: Special Articles, Economic and Social Research Institute (ESRI).
    10. Mali Chivakul & Waikei R Lam, 2015. "Assessing China’s Corporate Sector Vulnerabilities," IMF Working Papers 15/72, International Monetary Fund.
    11. Lawless, Martina & McCann, Fergal & O'Toole, Conor, 2013. "The importance of banks in SME financing: Ireland in a European context," Economic Letters 05/EL/13, Central Bank of Ireland.
    12. Reamonn Lyndon & Yvonne McCarthy, 2013. "What Lies Beneath? Understanding Recent Trends in Irish Mortgage Arrears," The Economic and Social Review, Economic and Social Studies, vol. 44(1), pages 117-150.
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