Do Loan-To-Value and Debt-To-Income Limits Work? Evidence From Korea
IMF Working Papers, December 1, 2011
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- Do Loan-To-Value and Debt-To-Income Limits Work? Evidence From Korea
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Bibliographic details
- Authors: Deniz O Igan, Heedon Kang
- Published: December 1, 2011
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781463927837.001
Summary and Key Findings
- The paper analyzes the Korean experience with loan-to-value (LTV) and debt-to-income (DTI) limits as macroprudential measures.
- LTV and DTI limits are associated with a decline in house price appreciation and transaction activity.
- The limits alter expectations, which play a key role in bubble dynamics.
Policy Implications
- Macroprudential measures such as LTV and DTI limits can be effective tools to moderate housing market overheating.
- By affecting expectations, these limits can influence bubble formation and dynamics beyond their direct credit-quantity effects.
Publication and Authorship
- Authors: Deniz O Igan, Heedon Kang
- Publication date: December 1, 2011
- Series: Working Paper No. 2011/297
- Issue: 297
- Volume: 2011
- Pages: 35
- DOI: https://doi.org/10.5089/9781463927837.001
- Stock No: WPIEA2011297
- ISBN: 9781463927837
- ISSN: 1018-5941
Subjects and Keywords
- Subject: Financial institutions, Financial sector policy and analysis, Housing, Housing prices, Loans, Macroprudential policy instruments, Mortgages, National accounts, Prices
- Keywords: appreciation rate, DTI limit, DTI regulation, Global, house price, Housing, housing markets, Housing prices, Loans, Macroprudential policy instruments, macroprudential regulation, mortgage, Mortgages, price appreciation, WP
IMF Working Papers — "Do Loan-To-Value and Debt-To-Income Limits Work? Evidence From Korea" (Deniz O Igan, Heedon Kang, December 1, 2011).