On Thursday, September 26, from 10:30 AM to 12:00 PM, a research seminar will take place at the Eesti Pank, where Simona Malovaná, head of the financial research unit of the Czech National Bank, will present a study on the impact of borrower-based macroprudential measures on borrowing and lending conditions for households with different income levels and inequality more broadly. Several European countries, including Estonia, have implemented such borrower-based measures, such as limits on mortgage collateral and loan payment caps, following the 2007–2008 global financial crisis.

The study is based on data collected from all four waves of the Household Finance and Consumption Survey (HFCS), covering 22 countries from 2010 to 2022. More information about the survey.

The study to be presented at the Eesti Pank is co-authored by Czech National Bank economists Dominika Ehrenbergerová and Zuzana Gric. A summary of the study can be found at the bottom of the invitation.

Simona Malovaná’s research has primarily focused on the interrelationships between financial stability, macroeconomics, and the financial sector, as well as green financing and climate-related risks. More detailed information about her research and publications can be found at https://simonamalovana.com/about.

The seminar will take place in the seminar room of the Eesti Pank (Estonia pst 11). Please confirm your attendance by September 24 by emailing eve.magin@eestipank.ee.

You are also welcome to participate in the seminar via Webex online platform. Meeting number: 2744 273 2237

If an event number or password is required, use: jAfGTrSb226 (52348772 when joining via phone or another video system).

Distributional Effects of Borrower-Based Macroprudential Measures
Dominika Ehrenbergerová, Zuzana Gric and Simona Malovaná

Using household-level survey data on 22 European countries collected in four waves between 2010 and 2022, we document the distributional effects of borrower-based macroprudential measures (BBM). We find that the tightening of the BBM significantly reduces the availability of mortgages for lower-income households, leading to increased reliance on renting. Regulation works not only through the extensive margin by cutting off risky borrowers from the mortgage market, but also through the intensive margin by reducing the average loan amount of households with lower incomes. This reduction in risk has the positive side effect of lower borrowing costs, benefiting mainly households with above-average incomes. The easing of BBM, observed in several countries, does not yet fully reverse these effects.