{
  "title": "Macroprudential Policy Calibration for Greece: Simulations for Borrower-Based Measures",
  "publication": "Selected Issues Papers, February 20, 2024",
  "sourceUrl": "https://www.imf.org/en/publications/selected-issues-papers/issues/2024/02/19/macroprudential-policy-calibration-for-greece-simulations-for-borrower-based-measures-545049",
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  "summary": "The Greek financial system has remained resilient underpinned by strengthening banks’ balance sheets, but still faces significant challenges ahead including the re-emergence of imbalances in the real estate market.",
  "sections": [
    {
      "heading": "Key Findings and Context",
      "content": "- The Greek financial system has remained resilient underpinned by strengthening banks’ balance sheets, but still faces significant challenges ahead including the re-emergence of imbalances in the real estate market.\n- The authorities have recently introduced the necessary legal framework for setting borrower-based measures (BBMs), paving the way to activate both income- and collateral-based measures in near term.\n- Simulations show that BBMs would help enhance household resilience, with synergies when caps on debt service-to-income (DSTI) and loan-to-value (LTV) ratios are jointly implemented.\n- Joint implementation of DSTI and LTV caps leads over time to a more resilient banking system against potential risks.\n- Caps could initially be set at less binding levels and gradually tightened based on a systemic risk assessment."
    },
    {
      "heading": "Simulations and Methodology",
      "content": "- Simulations employ a quantitative framework combining micro- and macro-level data.\n- Results emphasize complementarities between income-based (DSTI) and collateral-based (LTV) measures in strengthening household and banking system resilience."
    },
    {
      "heading": "Policy Recommendations and Calibration Guidance",
      "content": "- Activate both income- and collateral-based BBMs in the near term, leveraging the new legal framework.\n- Consider initial BBM caps that are less binding and progressively tighten them guided by systemic risk assessments.\n- Use joint DSTI and LTV caps to achieve synergies that enhance resilience across households and banks."
    },
    {
      "heading": "Publication and Metadata",
      "content": "- Authors: Marco Gross, Shiqing Hua, Mariusz Jarmuzek, Wei Shi\n- Date: February 20, 2024\n- Series: Selected Issues Paper No. 2024/008\n- Issue: 008\n- Volume: 2024\n- Pages: 20\n- DOI: https://doi.org/10.5089/9798400267383.018\n- ISBN: 9798400267383\n- ISSN: 2958-7875\n- Subject keywords: borrower-based measures; C. MACROPRUDENTIAL policy option; Credit; D. policy calibration; Global; Greece; household micro data and modeling; Loans; LTV cap; macroprudential policy; Mortgages; policy simulation; Real estate prices\n\nIMF Selected Issues Paper: \"Macroprudential Policy Calibration for Greece: Simulations for Borrower-Based Measures\" (February 20, 2024).\n\n---\n\n Content in this bundle\n\n- Conclusions and Policy Implications\n  - Conclusions and Policy Implications (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Conclusions and Policy Implications (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/selected-issues-papers/issues/2024/02/19/macroprudential-policy-calibration-for-greece-simulations-for-borrower-based-measures-545049"
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    "Authors: Marco Gross, Shiqing Hua, Mariusz Jarmuzek, Wei Shi",
    "Published: February 20, 2024",
    "Series: Selected Issues Papers",
    "DOI: https://doi.org/10.5089/9798400267383.018",
    "The Greek financial system has remained resilient underpinned by strengthening banks’ balance sheets, but still faces significant challenges ahead including the re-emergence of imbalances in the real estate market.",
    "The authorities have recently introduced the necessary legal framework for setting borrower-based measures (BBMs), paving the way to activate both income- and collateral-based measures in near term.",
    "Simulations show that BBMs would help enhance household resilience, with synergies when caps on debt service-to-income (DSTI) and loan-to-value (LTV) ratios are jointly implemented.",
    "Joint implementation of DSTI and LTV caps leads over time to a more resilient banking system against potential risks.",
    "Caps could initially be set at less binding levels and gradually tightened based on a systemic risk assessment.",
    "Simulations employ a quantitative framework combining micro- and macro-level data.",
    "Results emphasize complementarities between income-based (DSTI) and collateral-based (LTV) measures in strengthening household and banking system resilience.",
    "Activate both income- and collateral-based BBMs in the near term, leveraging the new legal framework.",
    "Consider initial BBM caps that are less binding and progressively tighten them guided by systemic risk assessments.",
    "Use joint DSTI and LTV caps to achieve synergies that enhance resilience across households and banks.",
    "Authors: Marco Gross, Shiqing Hua, Mariusz Jarmuzek, Wei Shi",
    "Date: February 20, 2024",
    "Series: Selected Issues Paper No. 2024/008",
    "Issue: 008",
    "Volume: 2024",
    "Pages: 20",
    "DOI: https://doi.org/10.5089/9798400267383.018",
    "ISBN: 9798400267383",
    "ISSN: 2958-7875",
    "Subject keywords: borrower-based measures; C. MACROPRUDENTIAL policy option; Credit; D. policy calibration; Global; Greece; household micro data and modeling; Loans; LTV cap; macroprudential policy; Mortgages; policy simulation; Real estate prices",
    "**Conclusions and Policy Implications**"
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