Tightening LTV limits further may then have a rather limited impact on house prices and leverage. DTI limits, in contrast, tighten by definition whenever housing values expand faster than incomes.25 They begin to bind for an increasing number of borrowers helping to exert a counter-cyclical influence. The simulation results in Gelain et. al.
Accordingly, in 2007, the European Central Bank and the Swiss National Bank each entered into a swap arrangement with the U.S. Federal Reserve, enabling the two European central banks to supply U.S. dollar funds to financial institutions in their jurisdictions.