These may include the regulation of various ratios, such as loan-to-value (LTV) or payment-to-income (PTI), or forbidding “toxic” products. Hungary recently has deployed such tools in order to discourage unhedged FX lending, which proved to be a major source of systemic risk. Regulation may be stricter in the case of systemically important (e.g. too-big-to-fail) financial institutions.
Typical examples of countercyclical tools are dynamic provisioning (e.g. the one in place in Spain even before the crisis) or a countercyclical capital buffer (e.g. the one proposed in the new Basel III regulatory standards). Similarly to monetary policy, macroprudential policy can be tight or loose. In other words macroprudential policy may be characterised by its stance, just like monetary policy.