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The transmission and effectiveness of macroprudential policies for residential real estate

Author

Listed:
  • Tereanu, Eugen
  • Behn, Markus
  • Lang, Jan Hannes
  • Lo Duca, Marco

Abstract

Macroprudential measures can effectively support the resilience of households and banks and help tame the build-up of residential real estate (RRE) vulnerabilities. By capping the riskiness of new loans, borrower-based measures contribute to moderating RRE vulnerabilities in the short-term and to increasing the resilience of households over the medium term. By inducing banks to use more equity financing, capital-based measures increase bank resilience in the short and medium term but are unlikely to have a significant dampening effect on RRE vulnerabilities during the upswing phase of a financial cycle. The two categories of measures are mainly complementary and many European countries have therefore implemented them in combination in recent years. JEL Classification: G01, G21, G28, E58, R38

Suggested Citation

  • Tereanu, Eugen & Behn, Markus & Lang, Jan Hannes & Lo Duca, Marco, 2022. "The transmission and effectiveness of macroprudential policies for residential real estate," Macroprudential Bulletin, European Central Bank, vol. 19.
    • Handle: RePEc:ecb:ecbmbu:2022:0019:3
    Note: 2203070
    as

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    File URL: https://www.ecb.europa.eu//pub/financial-stability/macroprudential-bulletin/html/ecb.mpbu202210_3~b569204afa.en.html
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    More about this item

    Keywords

    Borrower-based measures; Capital-based measures; Macroprudential policies; Residential real estate;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

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