Whilst the calibration and impact differ greatly, sixteen Member States of the European Union have introduced some form of loanto-value, loan-to-income, or debt service-to-income (DSTI) measure to enhance the resilience of their respective domestic financial systems. 14 The threshold for the loan-to-income ratio in Ireland is set at 3.5 times gross income.
The firm anchoring of inflation expectations – throughout a time of crisis – meant that we could maintain the rate on our refinancing operations at positive levels without having the materialisation of a deflationary risk or of an inflationary threat. Europe’s leaders should recognise that our economic model is in need of a considerable strengthening, especially our system of economic governance.