The Anatomy of the Transmission of Macroprudential Policies: Evidence from Ireland

We provide a comprehensive analysis of the transmission of macroprudential policies aimed at limiting bank risk-taking in residential real estate.

Wer

Tim Eisert (Erasmus University Rotterdam)

Wo

IWH conference room

Zur Person

Tim Eisert is currently an Assistant Professor of Finance at the Erasmus School of Economics (Erasmus University Rotterdam) and an Associate Member of ERIM. His research interests include financial intermediation, corporate finance, and corporate governance. My work is both theoretical and empirical and focuses on aspects of financial interconnectedness, financial crises and corporate governance of financial and non-financial firms.

Programm

We provide a comprehensive analysis of the transmission of macroprudential policies aimed at limiting bank risk-taking in residential real estate. Combining supervisory loan- and security-level data, we examine the effect of loan-to-income and loan-to-value limits on residential mortgages issued by Irish banks after February 2015 on household access to credit and bank risk-taking. We find that, in response to the macroprudential policy, banks increase their risk-taking in both corporate credit and holdings of securities and reduce the rate charged to high income households who lever up buying expensive properties.