[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"detail-sidebar-cat-1-en-105":3,"doc-seo-565116-105":53,"doc-detail-565116-en":126},{"code":4,"msg":5,"data":6},0,"success",[7,14,19,24,29,34,39,44,49],{"id":8,"doc_module":9,"doc_module_name":10,"category_name":11,"show_sort_weight":12,"slug":13},11,1,"Template","Presentations",90,"presentations",{"id":15,"doc_module":9,"doc_module_name":10,"category_name":16,"show_sort_weight":17,"slug":18},12,"Resumes",80,"resumes",{"id":20,"doc_module":9,"doc_module_name":10,"category_name":21,"show_sort_weight":22,"slug":23},14,"Invoices",70,"invoices",{"id":25,"doc_module":9,"doc_module_name":10,"category_name":26,"show_sort_weight":27,"slug":28},15,"Posters",60,"posters",{"id":30,"doc_module":9,"doc_module_name":10,"category_name":31,"show_sort_weight":32,"slug":33},16,"Social Media",50,"social-media",{"id":35,"doc_module":9,"doc_module_name":10,"category_name":36,"show_sort_weight":37,"slug":38},17,"Forms",40,"forms",{"id":40,"doc_module":9,"doc_module_name":10,"category_name":41,"show_sort_weight":42,"slug":43},18,"Letters",30,"letters",{"id":45,"doc_module":9,"doc_module_name":10,"category_name":46,"show_sort_weight":47,"slug":48},21,"Paper Templates",5,"papers-templates",{"id":50,"doc_module":9,"doc_module_name":10,"category_name":51,"show_sort_weight":4,"slug":52},158,"General","general-158",{"code":4,"msg":54,"data":55},"ok",{"site_id":56,"language":57,"slug":58,"title":59,"keywords":60,"description":61,"schema_data":62,"social_meta":119,"head_meta":121,"extra_data":123,"updated_unix":125},105,"en","cgfs-papers-no-69-macroprudential-policies-to-mitigate-housing-market-risks-country-case-study-israel","CGFS Papers - No 69 - Macroprudential policies to mitigate housing market risks - Country case study: Israel","","CGFS Papers No 69 examines how macroprudential policy can mitigate housing-market risks, using Israel as a country case study. It describes how rising house prices in 2008 were followed by a sharp expansion in new mortgages, increasing banks’ exposure and vulnerability to macroeconomic and idiosyncratic shocks. The paper outlines the Bank of Israel’s objectives and instruments, including borrower-based limits on LTV, DSTI, amortisation terms, and the floating-rate share, alongside measures that strengthen banks’ loss-absorption capacity.",{"@graph":63,"@context":118},[64,80,101],{"@type":65,"itemListElement":66},"BreadcrumbList",[67,71,74,77],{"item":68,"name":69,"@type":70,"position":9},"https://docshare.wps.com","Home","ListItem",{"item":72,"name":10,"@type":70,"position":73},"https://docshare.wps.com/template/",2,{"item":75,"name":11,"@type":70,"position":76},"https://docshare.wps.com/template/presentations/",3,{"item":78,"name":59,"@type":70,"position":79},"https://docshare.wps.com/template/cgfs-papers-no-69-macroprudential-policies-to-mitigate-housing-market-risks-country-case-study-israel/565116/",4,{"url":78,"name":59,"@type":81,"image":82,"author":87,"headline":59,"publisher":90,"fileFormat":93,"inLanguage":57,"description":61,"dateModified":94,"datePublished":95,"encodingFormat":93,"isAccessibleForFree":96,"interactionStatistic":97},"DigitalDocument",{"url":83,"@type":84,"width":85,"height":86},"https://docshare.wps.com/thumbnails/cgfs-papers-no-69-macroprudential-policies-to-mitigate-housing-market-risks-country-case-study-israel/565116.png","ImageObject",442,249,{"name":88,"@type":89},"Cipher","Person",{"url":68,"name":91,"@type":92},"DocShare","Organization","application/pdf","2026-10-25","2026-10-12",true,{"@type":98,"interactionType":99,"userInteractionCount":76},"InteractionCounter",{"@type":100},"ViewAction",{"@type":102,"mainEntity":103},"FAQPage",[104,110,114],{"name":105,"@type":106,"acceptedAnswer":107},"Why does the paper treat housing credit as a source of risk for the Israeli banking system?","Question",{"text":108,"@type":109},"Because housing exposures grew rapidly alongside house price increases and became correlated with other credit risks, which vulnerability analyses showed as a weakness for the banking system.","Answer",{"name":111,"@type":106,"acceptedAnswer":112},"What are the three main objectives of the Banking Supervision Department (BSD) under Israeli law?",{"text":113,"@type":109},"Protecting depositors’ money, assuring orderly functioning of the banking system, and protecting consumers of banking services.",{"name":115,"@type":106,"acceptedAnswer":116},"Which borrower-based instruments are used to reduce risks in new mortgages?",{"text":117,"@type":109},"The framework includes limits on LTV and DSTI ratios, constraints on the amortisation term, and restrictions on the share of floating interest rates in total loan amounts.","https://schema.org",{"og:url":78,"og:type":120,"og:title":59,"og:site_name":91,"og:description":61},"article",{"robots":122,"canonical":78},"index,follow",{"doc_id":124,"site_id":56},565116,1792456325,{"code":4,"msg":5,"data":127},{"doc_id":124,"user_id":128,"nickname":88,"user_avatar":129,"doc_module":9,"category_id":8,"category_name":11,"doc_title":59,"doc_description":61,"doc_content":130,"file_id":131,"file_url":132,"file_type":133,"file_size":134,"view_count":76,"is_deleted":4,"is_public":9,"is_downloadable":9,"audit_status":9,"page_count":8,"language":135,"language_code":57,"site_id":56,"html_lang":57,"table_of_contents":136,"faqs":137,"seo_title":138,"seo_description":61,"update_tm":139,"read_time":79},687208528416,"https://ap-avatar.wpscdn.com/davatar_9964176cb1d06d4a9deccf72a44ae3dc","CGFS Papers  \nNo 69  \nMacroprudential policies to mitigate housing market risks  \nCountry case study: Israel  \nDecember 2023  \nMacroprudential policies to mitigate housing market risks Case study – Israel  \nAuthor: Ziv Naor (Bank of Israel)  \n1. Housing as a source of risk  \nTaking out a housing loan is a significant financial decision for a household, accompanied by weighty and lengthy economic implications. The considerable sum involved, and the long loan term expose the borrower to a range of risks in the case of macroeconomic or idiosyncratic shocks.  \nIn 2008 house prices in Israel started to sharply rise as a result of excess demand for dwellings. This was partly driven by a reduction in housing starts and higher demand due to lower global and local interest rates after the great financial crisis (GFC) . The sharp rise in house prices was shortly followed by a dramatic rise in the volume of new mortgages (Graph 1) granted by local banks. As a result, a growing share of banks’ portfolios was either credit for housing or for risks correlated with it, such as consumer credit and credit for construction and real estate (Graph 2) . Assessing this risk through stress-tests indicated that housing exposures had become a source of vulnerability for the Israeli banking system.  \nTo better assess the risks embodied in housing credit, the Bank of Israel’s Banking Supervision Department (BSD) collects granular data with respect to each mortgage granted by each bank. The rich data allows for a large variety of analyses, including simulations for tool calibration and for effectiveness assessments.  \nThe Israeli mortgages market is relatively complicated: each loan may consist of several “tracks”that differ in terms of indexation to CPI, as well as with fixed or variable interest rates (Graph 3 presents the distribution of new mortgages by type of indexation and type of interest rate) . Thus, alongside the common risks embodied in a long financial obligation, most households are exposed to both interest and inflation risks. Moreover, mortgages are recourse loans, so there is a risk that the loan may exceed the value of collateral.  \n2. Objectives  \nThe Israeli law instructs the BSD to act for the wellbeing of the public and the economy by pursuing three main objectives: protecting depositors’ money, assuring the orderly functioning of the banking system and protecting consumers of banking services.  \nIn order to protect bank customers’ deposits, the BSD closely follows each bank, assessing its risk portfolio, conducting stress tests, and performing examinations and surveys. The in-depth assessment is facilitated by Israel’s relatively concentrated banking system. An examination of the risks and the sources of vulnerabilities showed that credit for housing was a growing risk to the Israeli banking system, mainly due to its increasing size and its correlation with other credits, including consumer credit and credit for construction and real estate.  \nMoreover, there were growing consumer protection concerns about the public’s ability to properly evaluate the risks involved in mortgage loans. For that reason, the Bank of Israel instituted reforms  \nMacroprudential policies to mitigate housing market risks 1  \nto the mortgage market in 2021. The reforms instruct banks to provide borrowers with more information about loans, including the internal rate of return (IRR) of each loan proposal, taking into account the market projections supplied to the commercial banks by the Bank of Israel for inflation and interest rates over the entire lifetime of the mortgage. This allows the client to not only evaluate the risks but also to better compare different loan proposals.  \nThe framework for macroprudential measures adopted in Israel attempts to tackle the risks embodied in the growing share of credit accounted for by mortgages and other highly correlated loans. The framework divides the action into two components. The first component reduces the ri","cbCaisWGlEVLR70P","https://ap.wps.com/l/cbCaisWGlEVLR70P","pdf",932880,"English","# Housing as a source of risk\n# Objectives\n# Macroprudential instruments in practice","[{\"question\":\"Why does the paper treat housing credit as a source of risk for the Israeli banking system?\",\"answer\":\"Because housing exposures grew rapidly alongside house price increases and became correlated with other credit risks, which vulnerability analyses showed as a weakness for the banking system.\"},{\"question\":\"What are the three main objectives of the Banking Supervision Department (BSD) under Israeli law?\",\"answer\":\"Protecting depositors’ money, assuring orderly functioning of the banking system, and protecting consumers of banking services.\"},{\"question\":\"Which borrower-based instruments are used to reduce risks in new mortgages?\",\"answer\":\"The framework includes limits on LTV and DSTI ratios, constraints on the amortisation term, and restrictions on the share of floating interest rates in total loan amounts.\"}]","CGFS Papers - No 69 - Macroprudential policies to mitigate housing market risks - Country case study: Israel | PDF",1791846814]