 Macroprudential policy effectiveness and interaction with monetary policy: Lessons from debt service-to-income cap implementation in KazakhstanZhandos Ybrayev, Azamat Baizakov, Erlan Kailrullayev and Dana Mukhambetzhanova Economic Systems, 2025, vol. 49, issue 1 Abstract: We take advantage of the early adoption of the debt-service-to-income cap (DSTI) measure in Kazakhstan, as well as available granular information from the local credit registry to study the effects of macroprudential instruments on core financial stability parameters. Our results show that implementation of a DSTI cap of 50 % leads to around a 9 % decrease in 12 months in the amount of outstanding debt on average for the range of credits originated just around the introduction of the DSTI cap. We find that DSTI cap implementation decreased the probability of delinquency rates of loans by about 20 % in 12 months on average compared to credits granted before the realization of the DSTI cap. We provide evidence on the importance of loan size heterogeneity across time when estimating the impact of macro-prudential intervention, which is partly overlooked in the existing literature. Finally, our results suggest that macroprudential and monetary policy tools can be complementary depending on the specific business cycle developments. Keywords: Consumer credit; Household debt; DSTI; Credit registry; Kazakhstan (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecosys:v:49:y:2025:i:1:s0939362524000761 DOI: 10.1016/j.ecosys.2024.101254 Access Statistics for this article Economic Systems is currently edited by R. Frensch More articles in Economic Systems from Elsevier Contact information at EDIRC. |
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