However, regarding loans for housing, policy tools such as Loanto-Value or Debt-Service-to-Income (LTV or DSTI) ratios, need to be part of the macroprudential toolkit in order to effectively reign on or, at least, influence real estate asset prices, as these are among the most important drivers of the financial cycle. The announced revision of the CRDIV/CRR should provide an opportunity for the extension of the available instruments, as LTVs and DSTIs are not included in the current EU regulation. Clearly, measures addressing the credit supply side by banks – such as increased capital requirements, counter-cyclical capital buffers or dynamic provisioning – can be easy to activate but have proven to be of modest effectiveness. Furthermore, as non-banks play an increasingly important role in the provision of credit, measures targeting only the banks could just result in shadow-banks taking a considerable size of the mortgage business and fuelling a boom in house-prices. Fourth, stress tests of the banking and financial system must have a macroprudential dimension. Such comprehensive assessments need to be embedded in a macro-financial environment. They entail an assessment of the position of a specific economy in the financial cycle since, for example, the adequate level of capital requirements cannot be dissociated from a country’s position on the cycle. Fifth, macroprudential policy is complementary to monetary policy and should share the same status as a policy area. Central banks must have responsibilities in both policy areas even if they are not involved in microprudential supervision. Several reasons justify this set-up.
See also Ampudia, M., H. van Vlokhoven and D. Żochowski, (2016), “Financial fragility of euro area households”, Journal of Financial Stability, forthcoming; see also: ECB Working Paper Series No. 1737. 17  For details, see the Household Finance and Consumption Network webpage, https://www.ecb.europa.eu/pub/economic-research/research-networks/html/researcher_hfcn.en.html. 6  BIS central bankers’ speeches  remarks. Since March this year, the ECB started publishing a Macroprudential Bulletin 18 that will inform about the analytical work being done, the policy decisions adopted and assessed, as well as analysis of relevant regulatory developments. This will further contribute to enhance transparency in our assessments. We look forward to maintaining a lively dialogue with the community of people in official institutions, in the financial sector and in academia who are interested in the new important field of macroprudential policy. Thank you for your attention. This is the full text of a speech delivered in abridged form at the ECB on 26 April. 18  ECB Macroprudential Bulletin, (2016), Issue 1: http://www.ecb.europa.eu/pub/pdf/other/ecbmpbu201603.en.pdf?f584ec27e20fd378bdca2d6f68d5d7b9. BIS central bankers’ speeches  7