The Bank introduced the maximum LTV limits as a macroprudential measure to discourage speculation, prevent excessive leverage, and reduce systemic risk associated with the rapid expansion of credit in the construction sector. Customers borrowing from banks to purchase property for the first time will not be affected by these measures. b.
In addition, labour market functioning has been strengthened by addressing distortions related to the “two-tier” systems that characterise a number of euro area economies – in particular Spain and Italy. These measures should support social fairness by bringing to an end the situation where vulnerable temporary workers, mainly young people, de facto bear the full burden of the adjustment.