With Great Power Comes Great Responsibility: Macroprudential Tools at Work in Canada
Electronic Access:
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Summary:
The goal of this paper is to assess the effectiveness of the policy measures taken by Canadian authorities to address the housing boom. We find that the the last three rounds of macroprudential policies implemented since 2010 were associated with lower mortgage credit growth and house price growth. The international experience suggests that—in addition to tighter loan-to-value limits and shorter amortization periods—lower caps on the debt-to-income ratio and higher risk weights could be effective if the housing boom were to reignite. Over the medium term, the authorities could consider structural measures to further improve the soundness of housing finance.
Series:
Working Paper No. 2014/083
Subject:
Credit Financial institutions Housing Housing prices Insurance Loans Money Mortgages National accounts Prices
English
Publication Date:
May 12, 2014
ISBN/ISSN:
9781484383445/1018-5941
Stock No:
WPIEA2014083
Pages:
38
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