denis beau : macroprudential policies to mitigate housing market risks opening remarks by mr denis beau, first deputy governor of the bank of france, at the committee on the global financial system – bank of france conference " macroprudential policies to mitigate housing market risks ", paris, 24 june 2024. * * * ladies and gentlemen, it is my great pleasure to welcome you and all the distinguished speakers at the banque de france, here in paris, to this first - of - its - kind conference on " macroprudential policies to mitigate housing market risks ". the conference builds on the very interesting and useful work of a dedicated study group of the bank for international settlements'committee on the global financial system. the study group published a report in december 2023 that you have probably all heard of. this work has been all the more valuable as experience with macroprudential policy is quite recent in most countries, even if macroprudential policy for housing market risks is gaining ground – be it in the form of borrower - based or capital - based measures. one of the report's strong added values is to draw on the practical experience of 14 countries around the globe, with a combined total of 168 years of experience, to provide us with concrete lessons for macroprudential policy implementation. as we will reflect today, from a practical point of view, on how best to implement macroprudential policy for housing risks, we have to remember that macroprudential policy cannot be considered in isolation. beyond theory, we are now in a time of realworld policy - making with all the challenges this entails, starting with the many interactions real - life macroprudential policy has to take into account. let me highlight two of them in my introductory remarks today. 1. how to adapt? the challenge of the interaction with the macroeconomic environment the first interaction challenge is centered on the question : how to adapt? how can and should housing - related macroprudential policy deal with the current macroeconomic environment? the cgfs report highlights that a majority of countries have set up intermediate objectives for macroprudential policy for housing risks that mostly refer either to borrower or lender resilience or to dampening the cycle. however our understanding of macroprudential tool effectiveness is largely based on the experience from upswings. there is still a lot to learn about the optimal use of macroprudential tools in housing

of housing markets vulnerabilities is facilitated by consistency across all housing - related policies, including tax, planning and land supply policies that may have an impact on demandsupply imbalances in the housing market. in these interactions, the focus and added value of macroprudential policy for housing risks is to strengthen financial resilience. however, the perimeter of macroprudential policy for housing risks can sometimes be questioned. indeed, unlike other areas of macroprudential policy, housing - related macroprudential policies may have potentially large distributional consequences. but there are several ways in which such distributional costs can be mitigated, starting with the design of measures. flexibility margins are a common way to achieve this. the perimeter of macroprudential policy can also be challenged by developments in the financial sector. the role of non - banks in housing financing has to be carefully taken into account and may call, as in other areas, for the broadening of housing - related macroprudential policies beyond the banking sector. 2 / 3 bis - central bankers'speeches on this challenge of the interaction with other policies, i am sure that the panels on governance and on assessing the costs and benefits of macroprudential policy will be enlightening. conclusion i have underlined two interaction challenges for housing - related macroprudential policy – the interaction with the macroeconomic environment and the interaction with other policies. let me conclude by a third one that can help us to identify best practices and solutions : the interaction with other jurisdictions. compared with other macroprudential policies, cross - border leakages appear less relevant for housing risks. this does not mean that domestic housing risks cannot have an impact across borders : the 2007 - 08 financial crisis, which started with the spark of the subprime mortgage crisis in the united states, is a case in point. and this means that housing - related risks concern all jurisdictions, even if the structure of housing financing may be different. today we are gathered to reflect together on those important questions surrounding housing - related macroprudential policy - making and we have the opportunity to get inspired from what other jurisdictions around the globe are doing. i wish you fruitful and enlightening discussions throughout this conference. thank you for your attention. 3 / 3 bis - central bankers'speeches