Hi Brendan
I am delighted to see that you no longer think it is a good idea to give price fixing powers to the Central Bank.
However, I would have thought that the events of the recent credit crunch adequately demonstrated why it is unsafe to tie mortgage rates directly to the ECB refi rate (as opposed to, say, 12-month EURIBOR).
I'm also not sure that introducing different caps for different LTVs is really practical or fair to existing borrowers in NE or with limited home equity.
Otherwise, I wouldn't have a problem with your new proposal.
In practical terms, it gets you pretty much to the same place as my suggested formula for a statutory cap (133% of the average rate on all outstanding mortgages (including trackers) in the preceding quarter).