Real estate markets, financial stability and macroprudential policy

Jan Hannes Lang, Markus Behn, Barbara Jarmulska and Marco Lo Duca

Macroprudential Bulletin, 2022, vol. 19

Abstract: Credit-fuelled real estate booms can pose financial stability risks due to the important direct and indirect links between real estate markets, the economy and the financial system. Different types of macroprudential policy tools can be used to increase resilience to financial stability risks from residential real estate (RRE) markets. Borrower-based tools put a cap on the risk characteristics of new loans, while capital-based tools increase the loss absorption capacity of banks. The ECB, together with the national authorities, has an important role to play in shaping the macroprudential policy response to RRE risks in the euro area. JEL Classification: G01, G21, G38, G51, E58, R38

Keywords: banks; financial stability; households; macroprudential policy; Real estate (search for similar items in EconPapers)
Date: 2022-10
Note: 2731285
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