ECB economists design early-warning guide to trigger macro-prudential intervention
Paper isolates key indicators to tell policy-makers when to use macro-prudential measures
A new European Central Bank (ECB) working paper, published today, aims to provide policy-makers with a set of early-warning indicators to help guide decisions on when to activate macro-prudential tools targeting excessive credit growth and leverage.
In the paper, Identifying excessive credit growth and leverage, ECB economists Lucia Alessi and Carsten Detken select a group of key indicators including credit-to-GDP gaps, credit-to-GDP ratios, credit growth rates and real estate variables.
They
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