PRAGUE May 26 Using macroprudential tools such
as loan-to-volume or debt servicing-to-income ratios seems more
beneficial than raising interest rates to tame real estate
lending, central bank Vice-Governor Vladimir Tomsik said in an
article published on Friday.
He said using the ratios -- which the bank seeks approval
for in new legislation now in parliament -- would be less costly
to the economy than interest rates, and also allowed for
targeted response to market segments where problems develop.
"While increasing interest rates will lead to a lowering of
real estate prices and will tame the pace of credit growth, it
can also have significant negative impacts in the form of a drop
in real economic growth," he said in an article in the
Bankovnictvi magazine, posted on the central bank website.
He said there has been a further relaxation of credit
standards despite limits the bank set on loan-to-value ratios,
and that current developments posed a risk a spiral could emerge
between house prices and loans.
(Reporting by Jan Lopatka)