Regulators could instruct lenders that the combined maximum loan amount should not exceed 85% of the moving-average value of a property, offered as collateral, over the preceding four to six years.
Under this rule supervisors should require financial institutions to value assets using a long-term movingaverage when they are pledged (explicitly or implicitly) as collateral for new credit.
That concept and the value of using the 8-day movingaverage as key indicators for levels of support and resistance are both covered well in our trader education courses.