Measures such as credit controls, reserve ratios and liquidity ratios were used in Europe, and loan-to-value and repayment caps in the US. 2 Such measures were largely implemented at a time when the boundaries between fiscal, monetary, industrial and prudential policies were less clearly defined. Financial market deregulation and increasing central bank independence led to the clearer delineation of these policy functions.
At the same time, the rise of inflation targeting meant central banks used these non-interest rate policies less and less. In Ireland, credit, capital, and interest rate controls were progressively dismantled from the 1980s. 3  1  See Galati, Gabriele and Richhild Moessner (2011), “Macroprudential Policy – A Literature Review”, BIS Working Papers, No.337, Bank for International Settlements.