Heterogeneous Impacts of Macroprudential Policies: Financial Advisors, Regulatory Caps, and Mortgage Risk (Martin Cesnak, Andrej Cupak, Pirmin Fessler, Ján Klacso)

Martin Cesnak (), Andrej Cupak (), Pirmin Fessler () and Ján Klacso ()
Additional contact information
Martin Cesnak: National Bank of Slovakia
Andrej Cupak: LIS Cross-National Data Center, http://www.lisdatacenter.org/
Pirmin Fessler: Oesterreichische Nationalbank, Economic Analysis Division
Ján Klacso: National Bank of Slovakia

Working Papers from Oesterreichische Nationalbank (Austrian Central Bank)

Abstract: This paper examines the impact of borrower-based macroprudential policy tightening on mortgage lending in Slovakia, focusing in particular on the role of financial advisors in shaping loan characteristics. Using a comprehensive loan-level dataset from Slovak banks, we analyze the effects of key regulatory tools — Loan-to-Value (LTV), Debt-to-Income (DTI), and Debt Serviceto- Income (DSTI) limits — on mortgage risk profiles. Our contributions include: (1) showing that restrictive borrower-based measures (BBMs) reduce the riskiest loans but push lower-risk segments toward regulatory thresholds, thus increasing portfolio risk; (2) demonstrating that advisor-mediated loans tend to have higher amounts, LTVs, DTIs, and longer maturities, raising their riskiness; and (3) finding that strict enough DSTI limits not only reduce DSTI but may also indirectly effect other loan characteristics, such as DTI, LTV ratios, and loan volumes, suggesting broader policy impacts. Additionally, we identify significant front-loading behavior following policy tightening announcements, particularly for advisor-mediated loans. These findings highlight the importance of detailed micro-level data in capturing policy effects and informing more effective macroprudential regulation.

Keywords: debt behavior; financial advice; macroprudential policy; policy evaluation; heterogeneous effects; register microdata. (search for similar items in EconPapers)
JEL-codes: D12 D18 G21 (search for similar items in EconPapers)
Pages: 76
Date: 2025-01-16
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.oenb.at/dam/jcr:36635ab0-8e99-4c41-8509-ec9d76ba3add/wp-263.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:onb:oenbwp:263

Ordering information: This working paper can be ordered from
Oesterreichische Nationalbank, Economic Studies Division, POB 61, A-1011 Vienna, Austria

Access Statistics for this paper

More papers in Working Papers from Oesterreichische Nationalbank (Austrian Central Bank) P.O. Box 61, A-1011 Vienna, Austria. Contact information at EDIRC.
Bibliographic data for series maintained by Markus Knell ().