Amortisation requirements, the LTI ratio, and the LTV cap are macroprudential policy tools that are used in Sweden and many other countries. But what are the potential effects of these borrower-based measures? To answer to this question, Finansinspektionen commissioned two expert reports on the topic.
The aim was to benefit from independent expertise and use the reports as a basis to evaluate macroprudential policy measures and their impact.
FI commissioned the reports in 2023, and they were discussed at a seminar at FI in February 2024.
The following questions were of particular interest for FI and asked to the authors:
- Under which conditions can the existence or introduction of borrower-based measures reduce households' vulnerability to economic shocks?
- Under which conditions might they have the opposite effect, i.e., increase households' vulnerability to shocks
- How and when, if at all, should borrower-based measures be used to stabilise the macroeconomy?
- What are the possible methods to evaluate welfare costs of borrower-based measures?
- How is the regulatory experience with borrower-based measures from other countries?
