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The impact of macroprudential housing finance tools in Canada

Jason Allen (), Timothy Grieder, Tom Roberts and Brian Peterson

No 632, BIS Working Papers from Bank for International Settlements

Abstract: This paper combines loan-level administrative data with household-level survey data to analyze the impact of recent macroprudential policy changes in Canada using a microsimulation model of mortgage demand of first-time homebuyers. Policies targeting the loan-to-value ratio are found to have a larger impact on demand than policies targeting the debt-service ratio, such as amortization. In addition, we show that loan-to-value policies have a larger role to play in reducing default than income-based policies.

Keywords: macroprudential policy; household finnance; microsimulation models (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-cmp, nep-mac and nep-ure
Date: 2017-05
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