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How do macroprudential measures affect mortgage lending standards? Evidence from the ECB’s Bank Lending Survey

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  • Behn, Markus
  • Lo Duca, Marco
  • Perales, Cristian

Abstract

Using information from the ECB’s Bank Lending Survey, we examine how the implementation of borrower-based macroprudential measures (BBMs) between 2009-Q1 and 2023-Q3 affected mortgage lending standards in a sample of 15 euro area countries. We find that banks generally tightened credit standards around the implementation of BBMs, with the strongest effect occurring contemporaneously. Such tightening of credit standards is observed for different types of BBMs, including limits on loan-to-value or debt-service-to-income ratios and maturities. We also find mild evidence that legally binding measures imply a stronger tightening of credit standards than measures in the form of non-binding recommendations. Finally, this tightening is more pronounced in cases where mortgage loan growth or real estate price growth is high, consistent with BBMs effectively smoothing the credit cycle. JEL Classification: G21, G28, G51

Suggested Citation

  • Behn, Markus & Lo Duca, Marco & Perales, Cristian, 2026. "How do macroprudential measures affect mortgage lending standards? Evidence from the ECB’s Bank Lending Survey," Working Paper Series 3190, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20263190
    Note: 2203070
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    JEL classification:

    • 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
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth

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