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Aoife Horan

10 October 2022
MACROPRUDENTIAL BULLETIN - FOCUS
Macroprudential Bulletin Issue 19, 2022
Details
Abstract
During the Covid-19 pandemic banks appear to have avoided lending to firms reliant on real estate as collateral. When banks applied downward revaluations to existing real estate collateral they were also less likely to extend loans, particularly to highly leveraged borrowers.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
G20 : Financial Economics→Financial Institutions and Services→General
10 October 2022
MACROPRUDENTIAL BULLETIN - ARTICLE - No. 19
Details
Abstract
This article examines links between Commercial Real Estate (CRE) markets and financial stability. The global financial crisis demonstrated the implications of CRE boom-bust cycles for the stability of many countries’ financial systems. However, CRE risk assessment and macroprudential policy frameworks remain in their infancy due to both the markets’ complexity and the persistence of data gaps. This article takes steps towards closing a number of data gaps by using euro area credit register data to examine the size and nature of links between euro area (EA) banks and CRE markets. Moreover, given that this dataset covers the COVID-19 pandemic crisis period, the operation of these transmission channels can be seen in action, providing insight into how economic theory plays out in practice.
JEL Code
G00 : Financial Economics→General→General
C55 : Mathematical and Quantitative Methods→Econometric Modeling→Modeling with Large Data Sets?
R30 : Urban, Rural, Regional, Real Estate, and Transportation Economics→Real Estate Markets, Spatial Production Analysis, and Firm Location→General