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Macroprudential regulation of the housing market
Petrouš, Michal ; Hlaváček, Michal (advisor) ; Moravcová, Michala (referee)
Housing market has a considerable impact on the macroeconomic stability. There is an attempt to regulate housing market using a set of macroprudential tools. The first aim of this thesis is to describe and compare macroprudential regulation aiming at the contract between lenders and borrowers in the European Union and Norway. The second aim is to assess the influence of central banks in macroprudential policy-making on the probability that these instruments are implemented. The probability is estimated using a probit model. The comparison shows that there are considerable differences in implemented regulation between individual countries and that countries with high proportion of foreign currency denominated loans use macroprudential measures to mitigate borrowing in foreign currencies. Using the data from the European union and Norway, statistically significant influence of central bank involvement was not identified. The effect of central bank became significant when using larger dataset including non-European countries. In this dataset, the leading role of central bank is associated with lower probability that instruments targeting borrowers are implemented.
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Legal aspects of macroprudential regulation in the EU
Havelka, Jaroslav ; Kotáb, Petr (advisor) ; Vybíral, Roman (referee)
Legal aspects of macroprudential regulation in the EU Abstract Even though the term macroprudential regulation is regularly used in scientific literature, attempts to define this term are scarce. Clear delineation of macroprudential regulation enables the distinction of macroprudential tools from other policy tools, such as microprudential supervision tools or capital controls. Moreover, it allows the determination of essential macroprudential tools and their current application in light of the crisis related to the COVID-19 pandemic and the transition towards the CRR2/CRD5 framework. As part of the EU legal order, macroprudential regulation interacts with the principles of internal market functioning. As a matter of principle, macroprudential measures should not contradict rules governing the internal market, even though some tensions with the free movement of capital may emerge. Uncertainties about the judicial review of macroprudential regulation may also exist. Macroprudential measures should subject to a less rigorous judicial review inspired by CJEU monetary policy case law. The rationale behind this lies in the highly complex economic decision-making process accompanying the adoption of macroprudential regulation. There is vast heterogeneity amongst EU member states concerning the application of...
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Macroprudential regulation of the housing market
Petrouš, Michal ; Hlaváček, Michal (advisor) ; Malovaná, Simona (referee)
House price developments have a large impact on the macroeconomic stability, which has proven in the recent global financial and economic crisis triggered by a house price boom and bust. The aim of this thesis is to assess the effectiveness of macroprudential regulation aiming at the contract between lenders and borrowers in mitigating housing price and associated credit cycle. To assess effectiveness the macroprudential regulation is analyzed in ten European countries. The regulation in individual countries is subsequently compared. The comparison shows that countries with high proportions of foreign currency denominated debt use macroprudential measures to mitigate foreign exchange risk. Furthermore, the immediate influence of regulation on housing credit is relatively high. However, it diminishes with time.
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Macroprudential regulation of the housing market
Petrouš, Michal ; Hlaváček, Michal (advisor) ; Moravcová, Michala (referee)
Housing market has a considerable impact on the macroeconomic stability. There is an attempt to regulate housing market using a set of macroprudential tools. The first aim of this thesis is to describe and compare macroprudential regulation aiming at the contract between lenders and borrowers in the European Union and Norway. The second aim is to assess the influence of central banks in macroprudential policy-making on the probability that these instruments are implemented. The probability is estimated using a probit model. The comparison shows that there are considerable differences in implemented regulation between individual countries and that countries with high proportion of foreign currency denominated loans use macroprudential measures to mitigate borrowing in foreign currencies. Using the data from the European union and Norway, statistically significant influence of central bank involvement was not identified. The effect of central bank became significant when using larger dataset including non-European countries. In this dataset, the leading role of central bank is associated with lower probability that instruments targeting borrowers are implemented.
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Coordination Incentives in Cross-Border Macroprudential Regulation
Derviz, Alexis ; Seidler, Jakub
When national financial sector regulators need to mutually harmonize macroprudential policy decisions, imperfections of cross-border information exchange may undermine fair cooperation. Attempts to overcome the effects of informational distortions by delegating macroprudential policy to a supranational body are also likely to entail welfare losses due to informational inefficiencies. We study the tradeoff between macroprudential policy autonomy and centralization by means of a signaling game of imperfect information played by two national regulators. The model concentrates on informational frictions in an environment with otherwise fully aligned preferences. We show that even in the absence of evident conflicting goals, the non-transferable nature of some regulatory information creates misreporting incentives. Reporting accuracy is a part of a broader problem of strategic advantage-seeking by the national regulators. Therefore, crossborder coordination mechanisms, centralized or not, that limit strategic behavior are preferable to those allowing its full deployment. The results are applicable to systemic risk management by international organizations, including the relevant EU institutions.
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