{
  "title": "The Case for Borrower-Based Macroprudential Measures in Spain",
  "publication": "Selected Issues Papers, June 29, 2026",
  "sourceUrl": "https://www.imf.org/en/publications/selected-issues-papers/issues/2026/06/26/the-case-for-borrower-based-macroprudential-measures-in-spai-577339",
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  "summary": "House prices in Spain have risen rapidly since the pandemic, and the share of riskier mortgages at issuance has increased, suggesting a potential buildup of mortgage-related vulnerabilities.",
  "sections": [
    {
      "heading": "Summary",
      "content": "- House prices in Spain have risen rapidly since the pandemic, and the share of riskier mortgages at issuance has increased, suggesting a potential buildup of mortgage-related vulnerabilities.\n- The paper provides analytical inputs to inform the potential design and calibration of borrower-based measures (BBMs), currently not activated in Spain.\n- It reviews international experience with BBMs and uses Spanish loan-level data and scenario-based stress tests to assess alternative calibrations.\n- Results suggest that loan-to-value caps would deliver the largest reduction in default risk and mortgage portfolio losses, with additional gains from income-based caps.\n- BBMs would complement capital buffers by addressing risks at origination."
    },
    {
      "heading": "Data and Methods",
      "content": "- Review of international experience with borrower-based measures (BBMs).\n- Empirical analysis using Spanish loan-level data.\n- Scenario-based stress tests to assess alternative BBM calibrations."
    },
    {
      "heading": "Key Findings",
      "content": "- Loan-to-value caps would deliver the largest reduction in default risk and mortgage portfolio losses.\n- Income-based caps provide additional gains when combined with loan-to-value limits.\n- The share of riskier mortgages at issuance has increased since the pandemic, contributing to potential mortgage-related vulnerabilities.\n- BBMs address origination-stage risks and therefore complement capital buffers."
    },
    {
      "heading": "Policy Implications and Recommendations",
      "content": "- Consider activation and careful calibration of borrower-based measures (BBMs) in Spain to mitigate a potential buildup of mortgage-related vulnerabilities.\n- Prioritize loan-to-value caps as they yield the largest reduction in default risk and mortgage portfolio losses.\n- Use income-based caps alongside loan-to-value caps to obtain additional risk-reduction benefits.\n- Employ BBMs to complement existing capital buffers, targeting risks at origination rather than through capital alone.\n\n---\n\n Content in this bundle\n\n- Sipea2026055\n  - Sipea2026055 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Sipea2026055 (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/selected-issues-papers/issues/2026/06/26/the-case-for-borrower-based-macroprudential-measures-in-spai-577339"
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    "Authors: Nina Biljanovska, Laura Valderrama",
    "Published: June 29, 2026",
    "Series: Selected Issues Papers",
    "DOI: https://doi.org/10.5089/9798229051712.018",
    "House prices in Spain have risen rapidly since the pandemic, and the share of riskier mortgages at issuance has increased, suggesting a potential buildup of mortgage-related vulnerabilities.",
    "The paper provides analytical inputs to inform the potential design and calibration of borrower-based measures (BBMs), currently not activated in Spain.",
    "It reviews international experience with BBMs and uses Spanish loan-level data and scenario-based stress tests to assess alternative calibrations.",
    "Results suggest that loan-to-value caps would deliver the largest reduction in default risk and mortgage portfolio losses, with additional gains from income-based caps.",
    "BBMs would complement capital buffers by addressing risks at origination.",
    "Review of international experience with borrower-based measures (BBMs).",
    "Empirical analysis using Spanish loan-level data.",
    "Scenario-based stress tests to assess alternative BBM calibrations.",
    "Loan-to-value caps would deliver the largest reduction in default risk and mortgage portfolio losses.",
    "Income-based caps provide additional gains when combined with loan-to-value limits.",
    "The share of riskier mortgages at issuance has increased since the pandemic, contributing to potential mortgage-related vulnerabilities.",
    "BBMs address origination-stage risks and therefore complement capital buffers.",
    "Consider activation and careful calibration of borrower-based measures (BBMs) in Spain to mitigate a potential buildup of mortgage-related vulnerabilities.",
    "Prioritize loan-to-value caps as they yield the largest reduction in default risk and mortgage portfolio losses.",
    "Use income-based caps alongside loan-to-value caps to obtain additional risk-reduction benefits.",
    "Employ BBMs to complement existing capital buffers, targeting risks at origination rather than through capital alone.",
    "**Sipea2026055**"
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