Friday, December 28, 2012
Several countries in Central, Eastern and Southeastern Europe used a rich set of prudential instruments in response to last decade’s credit and housing boom and bust cycles. A new paper collects detailed information on these policy measures in a comprehensive database covering 16 countries at a quarterly frequency. The authors use this database to investigate whether the policy measures had an impact on housing price inflation. Their evidence suggests that some—but not all—measures did have an impact. These measures were changes in the minimum CAR and non-standard liquidity measures (marginal reserve requirements on foreign funding, marginal reserve requirements linked to credit growth).
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