Public hearing on the EU’s Macro-prudential Policy

Date published: 7 November 2016

Finance Watch Secretary General, Christophe Nijdam, spoke on a panel at the European Commission's Public hearing on the EU’s Macro-prudential Policy in Brussels, 07 November 2016

Finance Watch’s position includes these points: 

  • Macro-prudential toolkit should encompass both banks and non-banks, and measures to address risks from securities financing transactions.
  • Macro-prudential tools such as limits on loan-to-value (LTV), loan-to-income (LTI)or tax incentives can be very effective to address imbalances in the real estate sector such as risks of overheating and bubbles, but their distributional aspects must be taken into account.
  • Capping LTV and LTI will likely reduce access to ownership for lower income households, while measures such as reducing the tax deductibility of debt interest and increasing inheritance tax are likely to affect more affluent segments of the population.
  • Other macro-prudential improvements include a stronger role for the European Systemic Risk Board (ESRB), ways to stop bank ‘bail-in’ from destabilising the wider financial system, a bigger role for the leverage ratio, curbs on collateral use, and bank structure reform.

Download the programme from the Commission’s event page

See also Finance Watch’s response to the Commission’s consultation on the EU’s Macro-prudential Policy, submitted on 24 October 2016