The old cliché about central bankers is that their job is to take away the punchbowl just as the party is starting.

The frustrating thing for the Central Bank of Ireland is that punchbowl control - in the form of power to change interest rates - has moved to Frankfurt. And due to a sluggish performance of the euro economy overall, the European Central Bank's (ECB) policy has kept interest rates low.

Traditional economic theory teaches that control of interest rates and the supply of money are the most powerful tools available to central banks. The other routes through which they influence affairs is what the textbooks grandly call "moral suasion", in other words using their influence to affect the actions of various players, and of course regulation of the financial sector.

With no power to shift interest rates, the Central Bank is trying to influence the course of events by ever louder warnings about the dangers posed by the rising property market.

The Central Bank's concern is that ever-higher borrowing will leave both homeowners and banks vulnerable in the event of a downturn in the property market. The bank is careful not to forecast such a collapse, but it warns that the continued rise in borrowing is " worrying."

But what can it do? So far the moral suasion approach from Dame Street does not appear to be slowing borrowing. Regulatory power, meanwhile, has moved to IFSRA, which is linked with the bank, but so far its examination of lending practices do not appear to have slowed lending growth.

The market may do so, as house-price growth appears to slow and investors calculate that lower rents and longer vacancy periods mean they should not be entering the market at any price.

There is no obvious short-term threat that would lead to a rapid fall in prices. Interest rates look set to rise only gradually and unemployment is low. But, with prices above the international norm, the market may still be vulnerable to a change in sentiment.

Interest rates will rise here at some stage. Last night's increase of 0.25 of a percentage point in US rates show that the international trend is upwards. Some analysts expect ECB rates to start moving up by the end of this year and most expect they will do so by 2005 at the latest.

The Central Bank makes no forecast about the timing of a rate increase. But it does warn that mortgage rates - now at around 3.5 per cent - could rise to 6 per cent in the course of the upward cycle in rates.

This is debatable, given the poor performance of the euro zone, but if it happens then the bank calculates that first-time buyers will face an average repayment burden of almost a third of disposable income, a level reached briefly in the early 1990s.

Reading between the lines, the bank is still hoping that a softish landing is in prospect for the housing market, but fears that the longer the borrowing surge continues, the greater the risk.