Why is the LSTI ratio increasing? Explaining factors of synthetic LSTI dynamics

Lavrič, Mitja and Lenarčič, Črt (2024): Why is the LSTI ratio increasing? Explaining factors of synthetic LSTI dynamics.

Abstract

In this paper, we focus on the analysis of the drivers of LSTI ratio dynamics. Against this backdrop, we try to bridge this gap by introducing an average synthetic LSTI calculation and examine how various factors affect the LSTI ratio of borrowers that took out consumer and housing loans in Slovenia based on monthly frequency data spanning from the beginning of 2020 to the end of 2023. We note that the general growth of the incomes of consumers who took out loans inhibited the growth of the average LSTI ratio. Factors affecting the LSTI ratio had an offsetting effect on the LSTI ratio of consumers who took out a consumer loan, while factors affecting the LSTI ratio caused an increase in the LSTI ratio of consumers who took out a housing loan. One of the more important factors that influenced the growth of the LSTI ratio of consumers who took out a housing loan was the increase in the interest rate for housing loans.

• Item Type: MPRA Paper
• Language: English
• Keywords: Macroprudential policy, LSTI Ratio, Borrower-Based Measures.
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C10 - General; C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C40 - General; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies

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