Our measures of domestic prudential regulations cover three aspects of macroprudential policy: maximum loan-to-value (LTV) ratios; existence of reserve requirements; and limits on credit concentration to specific sectors. While the existence of maximum LTV ratios and sector-specific credit concentration limits are coded by binary variables, the reserve requirement measure is coded as 0 if the reserve requirement ratio is below 10%; 0.5 if it is in the range of 10–20%; and 1 if it is greater than 20%. As above, we create two measures to capture domestic prudential regulations—Domreg1, which is an average of the reserve requirement variable, and limit on credit concentration to specific sectors; and Domreg2, which also includes the LTV limit. Fig. Between 2005 and 2007, the prevalence of domestic prudential regulations increased across
all regions. Nevertheless, Asian EMEs appear to rely the most on domestic macroprudential measures, while European EMEs the least.