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The impact of macroprudential housing finance tools in Canada

Author

Listed:
  • Jason Allen
  • Timothy Grieder
  • Tom Roberts
  • Brian Peterson

Abstract

This paper combines loan-level administrative data with household-level survey data to analyze the impact of recent macroprudential policy changes in Canada using a microsimulation model of mortgage demand of first-time homebuyers. Policies targeting the loan-to-value ratio are found to have a larger impact on demand than policies targeting the debt-service ratio, such as amortization. In addition, we show that loan-to-value policies have a larger role to play in reducing default than income-based policies.

Suggested Citation

  • Jason Allen & Timothy Grieder & Tom Roberts & Brian Peterson, 2017. "The impact of macroprudential housing finance tools in Canada," BIS Working Papers 632, Bank for International Settlements.
    • Handle: RePEc:bis:biswps:632
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    macroprudential policy; household finnance; microsimulation models;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques

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