tight compared with the pre - crisis period. against this backdrop, both residential and commercial real estate markets need to be closely monitored. and the two markets need to be seen in combination. after all, they are closely linked, and risks might spill over from one to the other. we also keep a close eye on household debt. over the past few years, households have reduced their debt, but the level is still high. at 106 % of gdp, the debt burden of dutch households is among the highest in the euro area. the same is true of the debt - to - income ratio, which stands at more than 200 %. moreover, as house prices are rising and more loans are being granted, the reduction of debt might come to an end. 5 / 6 bis central bankers'speeches against this backdrop, there might be a need for more active macroprudential policy. and by this i mean a tightening of existing borrower - based measures. with that in mind, the dutch financial stability committee and de nederlandsche bank have recommended that maximum loan - to - value, or ltv, ratios be further reduced to 90 % over the next ten years. in my view, this is called for. after all, ltv ratios in the netherlands are higher than in other countries. combined with the high levels of household debt, this poses a risk to financial stability. in addition, some have been calling for the tax deductions applicable to interest on mortgage loans to be brought down more quickly. here too, the netherlands stands out, with higher levels of tax relief for mortgage loans than in other countries. this kind of tax policy has proven to be pro - cyclical and has made the household sector more vulnerable. it would thus be sensible to speed up the reduction of tax relief. conclusion ladies and gentlemen, macroprudential policy is a relatively new thing. and what is new is almost never perfect ; that is also true of macroprudential policy. it still has to mature. we still need to refine the theory and translate it into tools that are fit for purpose, policies that work and an institutional architecture that is both lean and stable. all this requires further work and regular reviews of the status quo. let us now return to the fallacy of composition. each of you is made up of billions of cells. each of these cells is unconscious. therefore, you must be unconscious as well. but unless you fell asleep during my speech, you are very much

complexities of financial markets and activities, it is important to realize and emphasize that industry self - regulation cannot fully replace government regulation and supervision of the financial services sector. at the same time, it may not be out of place to say that co - operation amongst the statutory regulators and sros in an increasingly complex financial environment is no longer an option but a necessity. co - ordination and communication should be structured to address potential problems before they occur. one of the important regulatory lessons learnt from the recent global financial crisis is the need for a concerted response. the government or the regulator alone cannot provide an effective response. active engagement of market participants, in particular through industry bis central bankers ’ speeches organizations, such as, sros and other industry bodies with some self - regulatory capacity, is essential to craft practical regulatory responses and to act effectively on policy changes. in this era of fast paced liberalizations and developments, fedai should gradually assume the role of a full - fledged sro. typically, a generic and effective sro in its template of elements cover, inter alia, internal rulemaking process, authorisation and access to marketplace, including fitness / qualification standards for market intermediaries, surveillance of market activities, administration of dispute resolution, sharing information and cooperating with other sros and the regulators, etc. sros enable members to exercise self - discipline, make regulations more responsive to market demand and also promote innovation and development in a market based approach. this is critical for the development of the financial markets in order to make them competitive, regionally and globally, and improve standards of conduct by self - regulation. developmental role of fedai when the reserve bank issues instructions, it is expected that the instructions are understood, interpreted and implemented in a uniform and customer friendly manner by all ads without building up system level stresses. in the absence of unambiguous clarity of instructions to the base level official, the objectives of various measures initiated by the reserve bank may not yield the desired results. with the advent of fema which aims at facilitating external trade and payments besides promoting orderly development and maintenance of forex market in india, the economy has been witnessing rapid liberalizations. in such a scenario, fedai needs to monitor the level of customer service and consumer protection provided by its members and try to fill the gaps arising out of inadequate knowledge or operational bottlenecks. the reserve bank has been emphasizing the need for designing some basic training module covering the rules & regulations and also the operational guidelines for