"It is our job to say: 'Beware, the party does not have to last forever," he said in an interview to be published on Monday at the Tyden weekly magazine.

The central bank has been pushing for a bill giving it more powers regarding mortgages as it has said repeatedly that property prices seem to be overvalued and it has recommended banks adjust their lending policies accordingly.

"We are afraid that currently, when the economy is riding on the wave of optimistic expectations, the party might get out of hand," Hampl said in the interview.

"It is not about extinguishing a fire, because there is none, but about a mere prevention," he said.

The government launched a bill in January that would allow the central bank to cap loans according to debt-to-income (DTI), debt servicing-to-income (DSTI) and loan-to-value (LTV) ratios.

However, lawmakers eyeing an October election have not approved the bill in the lower house before its summer recess, making it all but certain that it will fall through and only the new house may pick it up.

Since April the bank has recommended that mortgages should not exceed 90 percent of property values (LTV) and that no more than 15 percent of customers should be given loans worth more than 80 percent of a property's value.

"The further our recommendations go, the less and the later they are respected," Hampl said.

(Reporting by Robert Muller; Editing by Greg Mahlich)