Citation

Discussion Paper Details

Please find the details for DP14959 in an easy to copy and paste format below:

Full Details   |   Bibliographic Reference

Full Details

Title: The Anatomy of the Transmission of Macroprudential Policies

Author(s): Viral V. Acharya, Katharina Bergant, Matteo Crosignani, Tim Eisert and Fergal McCann

Publication Date: June 2020

Keyword(s): House Prices, household leverage, macroprudential regulation and Residential Mortgage Credit

Programme Area(s): Financial Economics

Abstract: We analyze how regulatory constraints on household leverage-in the form of loan-to-income and loan-to-value limits-affect residential mortgage credit and house prices as well as other asset classes not directly targeted by the limits. Supervisory loan level data suggest that mortgage credit is reallocated from low-to high-income borrowers and from urban to rural counties. This reallocation weakens the feedback loop between credit and house prices and slows down house price growth in "hot" housing markets. Consistent with constrained lenders adjusting their portfolio choice, more-affected banks drive this reallocation and substitute their risk-taking into holdings of securities and corporate credit.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=14959

Bibliographic Reference

Acharya, V, Bergant, K, Crosignani, M, Eisert, T and McCann, F. 2020. 'The Anatomy of the Transmission of Macroprudential Policies'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=14959