6  BIS central bankers’ speeches  With your mind space fully taken up by issues like interest rates, liquidity traps and monetary policy transmission, it is easy to forget that monetary policy is also about reducing hunger and malnutrition, putting children in school, creating jobs, building roads and bridges and increasing the productivity of our farms and firms.
While LVRs have a financial stability goal, they have been an important consideration in our monetary policy assessment. We believe the dampening impact of LVRs on house price inflation and credit, and the diminished “wealth effects” on spending associated with it, have reduced consumer price inflation pressures by an amount similar to a 25–50 basis point increase in the OCR.