16 In addition, evidence from a range of studies suggests that decreases in the LTV ratio lead to a slowing of the rate of house price appreciation.17 However, some other research suggests that the effectiveness of LTV limits is not significant or somewhat temporary.18 Other macroprudential policies focus on lenders. First and foremost, tightening bank capital regulation enhances loss-absorbing capacity, strengthening financial system resilience.
The euro area, for example, generates excess savings of over 3% of its GDP. In conjunction with other factors, this export of savings adds at a global level to the downward pressure on interest rates. In other words, low interest rates are a symptom of macroeconomic interdependencies and measures which go well beyond monetary policy.