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Emil Bandoni

10 October 2022
MACROPRUDENTIAL BULLETIN - FOCUS
Gauging the sensitivity of loan-service-to-income (LSTI) ratios to increases in interest rates
Macroprudential Bulletin Issue 19, 2022
English
Details
Abstract
This focus shows that the interest rate sensitivity of the loan-service-to-income (LSTI) ratio depends on the initial loan-to-income (LTI) ratio, the loan maturity, the interest rate fixation period and the initial interest rate. Based on loan-level simulations for securitised mortgages we find that LSTI increases in response to higher interest rates would be manageable for most loans but pockets of vulnerabilities exist.
JEL Code
G51 : Financial Economics
E27 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Forecasting and Simulation: Models and Applications
E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
10 October 2022
MACROPRUDENTIAL BULLETIN - ARTICLE - No. 19
The analytical toolkit for the assessment of residential real estate vulnerabilities
English
Details
Abstract
Understanding the drivers for residential real estate (RRE) price developments, measuring house price overvaluation, monitoring trends in bank lending and borrowers’ creditworthiness is important for assessing RRE risks and informing policy responses. The ECB uses a comprehensive monitoring framework for regularly assessing RRE vulnerabilities comprising a series of core risk indicators complemented by a broad set of analytical tools. This article describes some of these tools to explain how they are employed in risk analysis.
JEL Code
R31 : Urban, Rural, Regional, Real Estate, and Transportation Economics→Real Estate Markets, Spatial Production Analysis, and Firm Location→Housing Supply and Markets
G01 : Financial Economics→General→Financial Crises
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G51 : Financial Economics
17 November 2021
FINANCIAL STABILITY REVIEW - BOX
Assessing the strength of the recent residential real estate expansion
Financial Stability Review Issue 2, 2021
English
Details
Abstract
In order to assess the strength of the current residential real estate expansion, we compare recent developments in euro area housing markets with the period ahead of the global financial crisis (GFC). We find that house price dynamics, overvaluation and the risk profile of new mortgage loans are at similar levels to those observed during the height of the pre-GFC cycle in 2007. However, vulnerabilities from mortgage lending developments and household balance sheets are currently below their pre-GFC levels. We conclude that the continued build-up of vulnerabilities in residential real estate markets calls for close monitoring and possible macroprudential measures.
JEL Code
R31 : Urban, Rural, Regional, Real Estate, and Transportation Economics→Real Estate Markets, Spatial Production Analysis, and Firm Location→Housing Supply and Markets
G51 : Financial Economics
P34 : Economic Systems→Socialist Institutions and Their Transitions→Financial Economics
G01 : Financial Economics→General→Financial Crises