Managing House Price Booms: The Role of Macroprudential Policies

Speech was given by Ratna Sahay, Deputy Director Monetary and Capital Markets Department, IMF at the IIM-Bangalore & IMF Conference on Housing Markets, Financial Stability and Growth.


Three areas were covered (excerpts from speech): 

  1. "The state of global housing markets - the global housing market is characterized by a two-speed recovery, with a strong rebound in house prices in many countries but a much weaker recovery in others. Policies have to be very alert to this difference. There are countries where housing markets, and often the overall economy, have not fully shrugged off the effects of the global financial crisis. In these countries, the first order of business clearly is to close output gaps and to nurture the housing sector back to health.
  2. The policy framework to manage house price boom - much of what was said applies at present to economies where housing markets are booming and private sector leverage is high. In such situations there can be an important role for macroprudential policies as part of the policy framework to create buffers and curb leverage to ensure that shocks from the housing sector do not spill over and threaten economic and financial stability.
  3. The role of macroprudential policies - the majority of the talk will be devoted to discussing what we know—and are learning—about how to make these policies more effective."


The entire speech with supporting graphs can be found at

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