Definitions matter when using DTI ratios – Riksbank paper
Choice matters for analysis and calibrating macro-prudential tools
Regulators need to choose their definitions carefully when setting debt-to-income ratios as a macro-prudential policy tool or using the figure for financial stability analysis, an economic commentary published today (August 18) by Sveriges Riksbank finds.
Authors Peter van Santen and Dilan Ölcer show "significant differences" appear between ratios calculated on the basis of household or individual debt, and gross, net or disposable income.
Different measures have different pros and cons, they
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