{
  "title": "How Effective is Macroprudential Policy? Evidence from Lending Restriction Measures in EU Countries",
  "publication": "IMF Working Papers, March 1, 2019",
  "sourceUrl": "https://www.imf.org/en/publications/wp/issues/2019/03/01/how-effective-is-macroprudential-policy-evidence-from-lending-restriction-measures-in-eu-46640",
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  "summary": "This paper assesses the effectiveness of lending restriction measures, such as loan-to-value and debt-service-to-income ratios, in affecting developments in house prices and credit. We use data on 99 lending standard restrictions implemented in 28 EU countries over 1990–2018.",
  "sections": [
    {
      "heading": "Summary and main findings",
      "content": "- Paper assesses the effectiveness of lending restriction measures, such as loan-to-value and debt-service-to-income ratios, in affecting developments in house prices and credit.\n- Uses data on 99 lending standard restrictions implemented in 28 EU countries over 1990–2018.\n- Key empirical findings:\n  - Lending restriction measures are generally effective in curbing house prices and credit.\n  - The impact is delayed and reaches its peak only after three years.\n  - The impact is asymmetric: tightening measures have weaker association with target variables compared to loosening measures.\n  - The association is stronger in countries outside of euro area and for legally-binding measures and measures involving sanctions.\n- Practical implication: Results have practical implications for macroprudential authorities."
    },
    {
      "heading": "Data and scope",
      "content": "- Number of lending standard restrictions analyzed: 99\n- Number of countries: 28 EU countries\n- Time period covered: 1990–2018\n- Policy instruments examined: loan-to-value ratios, debt-service-to-income ratios, and other lending restriction measures."
    },
    {
      "heading": "Policy-relevant conclusions",
      "content": "- Timing: Authorities should consider that effects of lending restrictions are delayed and peak after three years when designing and evaluating macroprudential interventions.\n- Asymmetry: Loosening measures may produce stronger associations with house prices and credit than tightening measures; policy calibration should reflect this asymmetry.\n- Design and enforcement: Legally-binding measures and measures involving sanctions are associated with stronger effects, suggesting enforcement and legal design matter for effectiveness.\n- Cross-country variation: Effects are stronger outside the euro area, indicating country-specific institutional and policy frameworks influence outcomes.\n\n---\n\n Content in this bundle\n\n- Working Paper\n  - Working Paper (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Working Paper (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/wp/issues/2019/03/01/how-effective-is-macroprudential-policy-evidence-from-lending-restriction-measures-in-eu-46640"
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    "[Markdown version](/en/publications/wp/issues/2019/03/01/how-effective-is-macroprudential-policy-evidence-from-lending-restriction-measures-in-eu-46640/index.md)",
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    "Authors: Tigran Poghosyan",
    "Published: March 1, 2019",
    "Series: IMF Working Papers",
    "DOI: https://doi.org/10.5089/9781498300872.001",
    "Paper assesses the effectiveness of lending restriction measures, such as loan-to-value and debt-service-to-income ratios, in affecting developments in house prices and credit.",
    "Uses data on 99 lending standard restrictions implemented in 28 EU countries over 1990–2018.",
    "Key empirical findings:",
    "Practical implication: Results have practical implications for macroprudential authorities.",
    "Number of lending standard restrictions analyzed: 99",
    "Number of countries: 28 EU countries",
    "Time period covered: 1990–2018",
    "Policy instruments examined: loan-to-value ratios, debt-service-to-income ratios, and other lending restriction measures.",
    "Timing: Authorities should consider that effects of lending restrictions are delayed and peak after three years when designing and evaluating macroprudential interventions.",
    "Asymmetry: Loosening measures may produce stronger associations with house prices and credit than tightening measures; policy calibration should reflect this asymmetry.",
    "Design and enforcement: Legally-binding measures and measures involving sanctions are associated with stronger effects, suggesting enforcement and legal design matter for effectiveness.",
    "Cross-country variation: Effects are stronger outside the euro area, indicating country-specific institutional and policy frameworks influence outcomes.",
    "**Working Paper**"
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