SNB paper: both monetary and macro-prudential policy impact arrears
Macro-pru tools can help prevent people from sliding into longer-term arrears
Monetary policy influences the level of mortgage arrears in an economy by affecting interest payments, income, employment and asset prices, according to a working paper published by the Swiss National Bank (SNB) – though this does not mean it should be used for that purpose.
In Mortgage arrears in Europe: the impact of monetary and macro-prudential policies, Petra Gerlach-Kristen and Seán Lyons argue monetary policy should only respond to arrears to the extent they affect consumption, output
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