{
  "title": "Borrower-Based Macroprudential Instruments in Germany",
  "publication": "Selected Issues Papers, July 24, 2023",
  "sourceUrl": "https://www.imf.org/en/publications/selected-issues-papers/issues/2023/07/24/borrower-based-macroprudential-instruments-in-germany-536843",
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  "summary": "Germany’s macroprudential policy toolkit is well-developed, but its key missing piece is a set of instruments related to a borrower’s income. In addition, existing powers to adopt LTV limits have not yet been deployed.",
  "sections": [
    {
      "heading": "Key findings",
      "content": "- Germany’s macroprudential policy toolkit is well-developed, but its key missing piece is a set of instruments related to a borrower’s income.\n- Existing powers to adopt LTV limits have not yet been deployed.\n- Borrower-based measures could strengthen:\n  - financial stability,\n  - macroeconomic stability,\n  - consumer protection.\n- A microsimulation model in the paper shows that activating borrower-based measures could provide as much capital to the banking system as the capital buffer requirements that were activated in 2022."
    },
    {
      "heading": "Policy analysis and recommendations",
      "content": "- The paper explains how potential concerns about borrower-based instruments could be addressed.\n- It offers approaches to initial calibrations of instruments for further analysis.\n- The paper hints at likely effects based on other countries’ experiences."
    },
    {
      "heading": "Modeling, calibrations, and scenarios",
      "content": "- Uses a microsimulation model to compare the capital-provision effects of borrower-based measures with the capital buffer requirements activated in 2022.\n- Provides example calibrations and references to a housing market crash scenario and a reference scenario as analytical contexts.\n\n---\n\n Content in this bundle\n\n- Sipea2023060\n  - Sipea2023060 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Sipea2023060 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/selected-issues-papers/issues/2023/07/24/borrower-based-macroprudential-instruments-in-germany-536843"
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    "Authors: Galen Sher",
    "Published: July 24, 2023",
    "Series: Selected Issues Papers",
    "DOI: https://doi.org/10.5089/9798400250965.018",
    "Germany’s macroprudential policy toolkit is well-developed, but its key missing piece is a set of instruments related to a borrower’s income.",
    "Existing powers to adopt LTV limits have not yet been deployed.",
    "Borrower-based measures could strengthen:",
    "A microsimulation model in the paper shows that activating borrower-based measures could provide as much capital to the banking system as the capital buffer requirements that were activated in 2022.",
    "The paper explains how potential concerns about borrower-based instruments could be addressed.",
    "It offers approaches to initial calibrations of instruments for further analysis.",
    "The paper hints at likely effects based on other countries’ experiences.",
    "Uses a microsimulation model to compare the capital-provision effects of borrower-based measures with the capital buffer requirements activated in 2022.",
    "Provides example calibrations and references to a housing market crash scenario and a reference scenario as analytical contexts.",
    "**Sipea2023060**"
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