m talking about the credit supply and demand curves shifting inwards. the former, by itself, reduces quantities while prices rise as the equilibrium shifts up along the demand curve. the latter, by itself, reduces quantities but decreases prices as the equilibrium shifts down along the supply curve. so what ’ s happened to the interest rates borrowers are actually paying? the securitisation dataset provides estimates for both owner - occupiers and investors. there has been a modest broad - based decline in outstanding mortgage rates in the securitisation dataset over the year to august ( graph 5 ). this suggests that banks were responding to weakness in credit demand by competing more vigorously to provide loans to highquality borrowers. indeed, looking just at new loans there is some evidence that average variable interest rates declined by more for investors than owner - occupiers, which is consistent with a noticeable decline in the demand for investor credit. 6 / 16 bis central bankers'speeches however, compositional changes might also explain why there was a slight decline in interest rates over this period. in particular, the tightening in lending standards has helped to shift the profile of loans away from higher - risk borrowers. this shift would have contributed to the decline in average interest rates paid as better quality borrowers tend to get loans at lower rates. however, it turns out that rates have declined over this period even within the set of low - risk borrowers – for example, those with low loan - to - valuation ratios ( lvrs ) ( graph 6 ). so the decline in average rates paid has been driven by factors other than just compositional changes. 7 7 / 16 bis central bankers'speeches while banks began the process of tightening lending standards from around 2015, over the past year or so they have extended these efforts by applying greater rigour to their assessments of the ability of prospective borrowers to service loans. for example, banks have been assessing borrowers ’ expenditures more thoroughly, which is likely to have contributed to reductions in the maximum loan sizes offered to borrowers. 8 notwithstanding these changes, there are two other pieces of evidence that suggest that factors other than just a tightening in constraints on the supply - side have been affecting housing credit and housing market developments over the past year or so : first, the majority of borrowers had earlier chosen to borrow much less than the maximum amounts offered by lenders. hence, reductions in the sizes of maximum loans on offer over the past year does not

and the european central bank in recent periods, uncertainty about interest rates has increased globally, leading to capital outflows from emerging markets. nevertheless, reinforced macroeconomic fundamentals, tight monetary and fiscal polices, the shock - absorbing function of the floating exchange rate regime, the reduced ratio of short - term foreign credits to international reserves and disciplined implementation of the current economic program minimize the adverse effects of outflows on the turkish economy. the rapid rise in the consumption tendency despite the relatively low increase in disposable income increases the indebtedness of households. therefore, close monitoring of likely risks for the household that may arise from the increasing demand for housing loans, which is still low compared to other countries, is of great importance. indeed, as seen in ( other ) country experiences, asset prices can rise rapidly in periods of expansion to be followed by slumps in housing prices, which would simultaneously push down the value of the collateral for the financial sector and decrease household wealth. therefore, these are important risk factors that should seriously be taken into account. dear guests, i would like to draw your attention to credit cards regarding the household indebtedness issue. as it is known, in general, the credit card is a payment instrument that enables its owner to purchase goods and services at member businesses without using cash. moreover, if credit card users wish to withdraw cash or to delay their credit card payments for a determined period, the relevant amounts spent turn into credit and thus the credit card becomes a credit instrument. institutions issuing credit cards incur pos ( point of sale ) machine investment and membership to national and international payment systems expenditures, and they are exposed to liquidity risk due to unforeseen cash withdrawals. consequently, banks tend to determine higher credit card interest rates than those of consumer credits due to their higher risk exposures, namely the higher credit risk because of weak collateral structure and liquidity risk because of unforeseen cash withdrawals. a survey of country practices also reveals that credit card interest rates are determined higher than interest rates set for consumer credits. therefore, it is in the interest of credit card users to meet their short - term credit needs via consumer credits rather than their credit cards. moreover, the interest rates applicable to credit card transactions differ significantly from bank to bank. the tendency of customers towards credit cards of banks with lower interest rates will enhance competition in the banking sector and the interest rates applicable to credit cards will be pushed down. the highest interest