Differential Effects of Macroprudential Policy
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Summary:
We explore the differential effects of lender-based macroprudential policies on new mortgage borrowing for households of different income using a comprehensive dataset that links macroprudential policy actions with household survey data for European Union countries. The main results suggest that higher-income households on average experience a larger reduction in mortgage loan size than lower-income households when regulation targeting total lenders’ assets tightens. In contrast, lower-income households on average experience a larger reduction in mortgage loan size than higher-income households when regulation targeting lenders’ capital requirements tightens. We also provide evidence of the different channels through which the differential effects operate.
Series:
Working Paper No. 2023/043
Frequency:
regular
English
Publication Date:
February 24, 2023
ISBN/ISSN:
9798400235719/1018-5941
Stock No:
WPIEA2023043
Pages:
45
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