The economics of mortgage debt relief during a pandemic

Edward Gaffney, Fergal McCann and Johannes Stroebel
Additional contact information
Edward Gaffney: Central Bank of Ireland
Fergal McCann: Central Bank of Ireland

No 6/FS/21, Financial Stability Notes from Central Bank of Ireland

Abstract: We discuss several features of the economic and institutional environment that are important for determining the design of household debt relief programs in response to aggregate economic shocks. For example, we describe how such program features should depend on the distribution of home equity in the population, the costs of participation to borrowers and lenders, as well as on whether the shocks are temporary or permanent in nature. We analyse the Irish response to the initial COVID-19 shock—which focussed on a broad extension of temporary payment breaks to mortgage borrowers—in light of these factors. Finally, we discuss potential features of adjusted mortgage contracts that may embed some of the benefits of the COVID-19 response in future events without the need for policymaker coordination.

Date: 2021-07
New Economics Papers: this item is included in nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.centralbank.ie/docs/default-source/pub ... ndemic.pdf?sfvrsn=12 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cbi:fsnote:6/fs/21

Access Statistics for this paper

More papers in Financial Stability Notes from Central Bank of Ireland Contact information at EDIRC.
Bibliographic data for series maintained by Fiona Farrelly ().