Borrower-based measures show value as macro-pru tools
Central Banking Summer Meetings: Central bankers resist pressure to ease buffers at first sign of downturn
Borrower-based measures (BBMs) have proven their worth as a component of macro-prudential toolkits, central bankers say.
Speakers at the 2023 Central Banking Summer Meetings who had deployed BBMs said they had yielded important benefits.
One central banker from an eastern European country said his institution learned lessons from a severe banking crisis. The central bank introduced BBMs, starting in the early 2010s, including limits on loan-to-value ratios and debt service.
“These standards
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Lessons learned on macro-pru policies
Tools are proving their worth although use cases vary by country; role in over-arching frameworks remains a challenge