Assessing the impact of macroprudential tools: the case of Israel
Nadine Baudot-Trajtenberg, Nitzan Tzur-Ilan and Roi Frayberg
Additional contact information
Nadine Baudot-Trajtenberg, Nitzan Tzur-Ilan and Roi Frayberg: Bank for International Settlements
Authors registered in the RePEc Author Service: Nitzan Tzur-Ilan ()
A chapter in Macroprudential frameworks, implementation and relationship with other policies, 2017, vol. 94, pp 107-218 from Bank for International Settlements
The Israeli financial system withstood the global financial crisis (GFC) of 2007–09 relatively well and came out unscathed. Notwithstanding this favourable outcome, Israel is a small open economy, which means that its domestic financial conditions cannot be disconnected from the consequences of low global interest rates. The upward trend in domestic asset prices, particularly home prices, has prompted policymakers to use macroprudential policy tools. This paper examines the effects that those measures have had on various risk indicators pertaining to credit providers and individual borrowers. We find that two typical risk indicators – the average loan-to-value (LTV)) and payment-to-income (PTI) ratios – have declined. Moreover, the banking system has increased its capital buffer for possible credit losses on its housing loan portfolio. Nevertheless, the authorities in charge of macroprudential policy must ascertain whether the measures implemented are not shifting risks to other, perhaps less visible, parts of the financial system. To complete a full assessment of the impact such policy on systemic risk, more granular and better data would be needed.
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bis:bisbpc:94-16
Access Statistics for this chapter
More chapters in BIS Papers chapters from Bank for International Settlements Contact information at EDIRC.
Bibliographic data for series maintained by Christian Beslmeisl ().