Further, the OECD estimated the nearing of a 10 peak to real house prices, if interest rates were to rise further. 20. Fourth, prudential policy is required in order to avoid the financial instability arising from a boom and bust in asset prices.
Such policy can contribute to preventing excessive risk-taking by financial institutions; it may be appropriate to strengthen the monitoring of unsupervised non-banks. In the case of sub-prime loans in the U.S., more than half of the loans were provided by unsupervised mortgage companies.