I only ask because the Central Bank of Ireland has just moved to relax its affordability criteria so people can borrow four times their salary, up from 3.5.
At a time of high inflationary pressure, and the prospect of more pain to come in 2023, this does not seem wise.
The role of central banks in keeping the wheels of the economy rolling is apparent to everyone, whether they are in loosening or tightening mode, keeping rates low or raising them as a tool to combat inflation.
But when it comes to helping banks to do what they do, or preventing consumers - those drivers of the economy - from getting into debt, sometimes it comes down too heavily on the side of big finance and forgets the potential longer-term impact on the consumer.
Earlier this year, when the Bank of England confirmed it was withdrawing its mortgage stress test in August, it was hailed as a sensible move by some, who felt it could help borrowers who were struggling to get onto the housing ladder.
Indeed, several even claimed it would not 'open the floodgates'. The assurances seemed to fall on ears willing to hear.
If you remember (and why would you? I barely remember my own name half the time), I wrote an op-ed calling the BoE a "reckless parent" when the stress test was dropped.
I wrote: "At a time of rising consumer indebtedness, removing any affordability criteria is not a move to be applauded."
This was long before the October inflation data came in, at 11.1 per cent CPI and 14.2 per cent RPI – a 41-year high.
Central bank relaxation
Now the Central Bank of Ireland has joined this party of reckless love, allowing people to borrow even more than their salaries should permit, when inflation in the ROI is surging to record levels.
There are warning signs everywhere that this inflation push is just the beginning of a big fiscal squeeze on people's pockets, whether in the UK, US, Canada, France, Germany, the Netherlands, Ireland, Spain or Australia (see the chart below).
Indeed, central banks are raising rates to combat inflation - so they are aware that people's pursebelts are being tightened.
The ramifications of Putin's war on Ukraine are global and widespread, wars and terrorist activity persist across many countries in the world, China's Covid-19 lockdowns are grinding growth to a near-standstill, and climate-change-related droughts and floods are contributing to mass migration and global disruption of supply chains.
