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Differential effects of macroprudential policy

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  • Biljanovska, Nina
  • Chen, Sophia

Abstract

We construct a comprehensive dataset linking macroprudential policy instruments to household survey data from European Union countries. We show that two commonly used lender-based macroprudential policy instruments — levy on financial institutions and minimum capital requirement — affect new mortgage loans depending on the household’s income levels. Following higher levies on financial institutions, higher-income households on average experience a larger reduction in mortgage loan size compared to lower-income households. In contrast, following higher minimum capital requirements, lower-income households on average experience a larger reduction in loan size. We provide evidence of the different channels through which these differential effects operate.

Suggested Citation

  • Biljanovska, Nina & Chen, Sophia, 2025. "Differential effects of macroprudential policy," Journal of Banking & Finance, Elsevier, vol. 176(C).
    • Handle: RePEc:eee:jbfina:v:176:y:2025:i:c:s0378426625000767
    DOI: 10.1016/j.jbankfin.2025.107456
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    More about this item

    Keywords

    Household borrowing; Macroprudential policy; Income distribution;
    All these keywords.

    JEL classification:

    • G5 - Financial Economics - - Household Finance
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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