While it is challenging getting macro-prudential policies understood and indeed calibrating them in terms of costs and benefits,1 I am a strong believer they redress the inherent tendency of banks to be pro-cyclical, underestimating credit risks when asset prices are rising.
I expect macro-prudential policies to remain an important policy tool in years to come, though how much they are applied in a temporary manner or via permanent standards will be a topic for future policymakers. Debt-to-Income restrictions to my mind are an important and probably better tool than LVRs, but perhaps a mix is best.