Real estate is a key economic sector for financial and macroeconomic stability. The sector is prone to boom/bust cycles and has been a common cause of banking crises in the past. Macroprudential authorities should therefore closely monitor developments in this crucial sector and stand ready to take policy action in case adverse developments pose a threat to financial stability. Over recent years, many EU countries have actively used macroprudential instruments to address vulnerabilities in the real estate sector. This article reviews the work of the European Systemic Risk Board (ESRB) concerning the residential and commercial real estate sectors and financial stability in the EU, covering both the ESRB’s analytical work and policy work.
Speech by Ivo Maes, Adviser Research Department National Bank of Belgium, on the occasion of the launch of the book Alexandre Lamfalussy: selected essays at the National Bank of Belgium, Brussels, 6 February 2017.