The impact of sectoral macroprudential capital requirements on mortgage loan pricing: Evidence from the Belgian risk weight add-on

Stijn Ferrari (), Mara Pirovano and Pablo Rovira Kaltwasser
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Stijn Ferrari: National Bank of Belgium

No 306, Working Paper Research from National Bank of Belgium

Abstract: In December 2013 the National Bank of Belgium introduced a sectoral capital requirement aimed at strengthening the resilience of Belgian banks against adverse developments in the real estate market. This paper assesses the impact of this macroprudential measure on mortgage lending spreads. Our results indicate that affected banks reacted heterogeneously to the introduction of the measure. Specifically, mortgage-specialised and capital-constrained banks increase mortgage lending spreads by a greater amount. As expected, the impact of the measure on mortgage loan pricing has been rather modest in economic terms.

Keywords: Systemic risk; macroprudential policy; bank capital requirements; real estate. (search for similar items in EconPapers)
JEL-codes: E44 E58 G21 G28 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2016-10
New Economics Papers: this item is included in nep-ban, nep-cba, nep-mac, nep-rmg and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:nbb:reswpp:201610-306

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