ECB paper presents new approach to modelling LTV caps
Agent-based model’s results show “subprime” segment to eurozone housing markets – researchers
A working paper published by the European Central Bank presents a new approach to modelling loan-to-value (LTV) caps and other macro-prudential measures.
In An agent-based model for the assessment of LTV caps, Dimitrios Laliotis et al say their model reveals a “subprime” segment in the eurozone’s housing market.
The authors map how LTV caps affect the behaviour of three different types of agent: home property sellers; buyers; and banks. There is a market-clearing mechanism consisting of
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