The impact of macroprudential housing finance tools in canada

Allen, Jason; Grieder, Timothy; Peterson, Brian; Roberts, Tom

doi:10.1016/j.jfi.2017.08.004

Cited by 37 publications

(21 citation statements)

References 21 publications

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“…Other studies (for example,Allen et al (2017) andAlam et al (2019)) also find a stronger relative impact of LTV limits. However, it is important to recall that the mortgage loan recourse system (full, in the case of Slovakia), as well as the characteristics of the lending standard distributions and binding-ness of policy caps, all play a role in determining the relative impact of LTV versus income-based policy limits.…”

mentioning

confidence: 82%

The Effectiveness of Borrower-Based Macroprudential Measures

Klacso¹,

Tereanu²,

Forletta³

et al. 2020

IMF Working Papers

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We develop a semi-structural quantitative framework that combines micro and macroeconomic data to assess the effectiveness of combinations of borrower-based macroprudential measures in Slovakia. We expand on the integrated dynamic household balance sheet model of Gross and Población (2017) by introducing an endogenous loan granting feature, in turn to quantify the potential (ex-ante) impact of macroprudential measures on resilience parameters, compared with a counterfactual no-policy scenario, under adverse macroeconomic conditions. We conclude that (1) borrower-based measures can noticeably improve household and bank resilience to macroeconomic downturns, in particular when multiple measures are applied; (2) those measures tend to complement each other, as the impact of individual instruments is transmitted via different channels; and (3) the resilience benefits are more sizeable if the measures effectively limit the accumulation of risks before an economic downturn occurs, suggesting that an early, preemptive implementation of borrower-based measures is indeed warranted.

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confidence: 82%

The Effectiveness of Borrower-Based Macroprudential Measures

Klacso¹,

Tereanu²,

Forletta³

et al. 2020

IMF Working Papers

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“…6 Some recent work on the importance of debt servicing has been done at policy institutions. See Aldasoro, Borio and Drehmann (2018), Allen et al (2017) and Bilyk, Ueberfeldt and Xu (2017). While certainly a start, more work needs to be done.…”

Section: The Study In Briefmentioning

confidence: 99%

Predicting Financial Crises: The Search for the Most Telling Red Flag in the Economy

Ambler¹,

Kronick

2020

SSRN Journal

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The C.D. Howe Institute's reputation for quality, integrity and nonpartisanship is its chief asset. Its books, Commentaries and E-Briefs undergo a rigorous two-stage review by internal staff, and by outside academics and independent experts. The Institute publishes only studies that meet its standards for analytical soundness, factual accuracy and policy relevance. It subjects its review and publication process to an annual audit by external experts. As a registered Canadian charity, the C.D. Howe Institute accepts donations to further its mission from individuals, private and public organizations, and charitable foundations. It accepts no donation that stipulates a predetermined result or otherwise inhibits the independence of its staff and authors. The Institute requires that its authors disclose any actual or potential conflicts of interest of which they are aware. Institute staff members are subject to a strict conflict of interest policy. C.D. Howe Institute staff and authors provide policy research and commentary on a non-exclusive basis. No Institute publication or statement will endorse any political party, elected official or candidate for elected office. The views expressed are those of the author(s). The Institute does not take corporate positions on policy matters.

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“…At the same time, Canada, like Chile and Columbia, makes extensive use of MPP tools (Cerutti et al, 2017). Canadian macroprudential policy is mainly aimed at reducing risks in the housing loan market (Allen et al, 2017).…”

Section: Canada and Australiamentioning

confidence: 99%

Commodity and Financial Cycles in Resource-based Economies

Tiunova¹

2019

RJMF

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This research analyses the influence of commodity prices on financial cycle parameters in commodity-exporting countries-Australia, Brazil, Canada, Columbia, Russia, and Chile-over the past two decades. One of the key issues discussed herein is the degree to which the extensive implementation of macroprudential policies can reduce the dependence of a country on global commodity cycles. Methodologically, this research is based on the Bayesian Structure Vector Autoregressive Model, structurally identified by means of variable recursive ranking and the Cholesky decomposition of the error covariance matrix. Changes in commodity prices are shown to provoke a stronger response from such financial cycle parameters as the sovereign risk premium and currency exchange rate in resource-based emerging market economies (Brazil, Columbia, Chile, and Russia) than in advanced economies (Canada and Australia). In Brazil, Columbia, Chile, and Russia, increases in commodity prices result in acceleration of the overall lending and external debt growth rate, while in Russia and Brazil they also trigger growth in the share of FX loans. In Australia and Canada, lending parameters react negatively to positive commodity price shocks. In the developing countries that apply macroprudential policy extensively (Columbia and Chile), lending dynamics are less dependent on changes in the global terms of trade. To reduce the impact of the commodity cycle on the financial cycle, the economic policy authorities of emerging market countries should develop national financial markets and introduce macroprudental policy tools more extensively.

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The impact of macroprudential housing finance tools in canada

Cited by 37 publications

References 21 publications

The Effectiveness of Borrower-Based Macroprudential Measures

The Effectiveness of Borrower-Based Macroprudential Measures

Predicting Financial Crises: The Search for the Most Telling Red Flag in the Economy

Commodity and Financial Cycles in Resource-based Economies

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