BIS central bankers’ speeches  5  LTV/DTI instruments The main weakness of capital instruments, such as the CCB or sectoral capital requirements is that they have their impact on the evolution of the cycle mainly through their effect on the cost/price of credit.
The impact of Macro-Prudential Policy With low interest rates unable to constrain credit growth, rapid house price inflation was creating financial stability risks for the banking system and, given the very high levels of household debt, increasing the risk that a rapid fall in house prices could have a severe economic impact.