a column by Jane Kelly, Julia Le Blanc and Reamonn Lydon for VOX: CEPR’s Policy Portal
Loan-to-value limits and other borrower-based macroprudential measures are now used in two-thirds of advanced economies.
This column uses survey data to document changes in credit standards in a cross-section of countries in the run-up to, and aftermath of, the financial crisis.
There is clear evidence of laxer credit standards in countries that experienced a real estate boom-bust, and a significant tightening after the bust. The results imply that compared to earlier years, younger and lower-income borrowers have to save for longer before buying.
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