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Real estate markets, financial stability and macroprudential policy

Author

Listed:
  • Lang, Jan Hannes
  • Behn, Markus
  • Jarmulska, Barbara
  • Lo Duca, Marco

Abstract

Credit-fuelled real estate booms can pose financial stability risks due to the important direct and indirect links between real estate markets, the economy and the financial system. Different types of macroprudential policy tools can be used to increase resilience to financial stability risks from residential real estate (RRE) markets. Borrower-based tools put a cap on the risk characteristics of new loans, while capital-based tools increase the loss absorption capacity of banks. The ECB, together with the national authorities, has an important role to play in shaping the macroprudential policy response to RRE risks in the euro area. JEL Classification: G01, G21, G38, G51, E58, R38

Suggested Citation

  • Lang, Jan Hannes & Behn, Markus & Jarmulska, Barbara & Lo Duca, Marco, 2022. "Real estate markets, financial stability and macroprudential policy," Macroprudential Bulletin, European Central Bank, vol. 19.
    • Handle: RePEc:ecb:ecbmbu:2022:0019:1
    Note: 2731285
    as

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    More about this item

    Keywords

    banks; financial stability; households; macroprudential policy; 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
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • 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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