## Macroprudential Policy Calibration for Greece: Simulations for Borrower-Based Measures

_Selected Issues Papers, February 20, 2024_

## Source details

**Canonical URL:** [Macroprudential Policy Calibration for Greece: Simulations for Borrower-Based Measures](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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## Bibliographic details
- 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

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### Key Findings and Context
- 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 and Methodology
- 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.

### Policy Recommendations and Calibration Guidance
- 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.

### Publication and Metadata
- 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

*IMF Selected Issues Paper: "Macroprudential Policy Calibration for Greece: Simulations for Borrower-Based Measures" (February 20, 2024).*

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## Content in this bundle

- **Conclusions and Policy Implications**
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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2024/02/19/macroprudential-policy-calibration-for-greece-simulations-for-borrower-based-measures-545049_