Mortgage arrears, regulation and institutions: Cross-country evidence

Irina Stanga, Razvan Vlahu and Jakob de Haan

Journal of Banking & Finance, 2020, vol. 118, issue C

Abstract: Using a newly constructed database for 26 countries over 2000-2014, we analyze cross-country and within-country differences in mortgage arrears. We find that restrictive macro-prudential policies, in particular lower regulatory loan-to-value ratios, are significantly associated with a lower share of mortgage arrears in total residential debt. Likewise, better institutions are related with lower delinquency rates, both directly and by enhancing the impact of macro-prudential policies and the right to recourse. We also find that the effect of macro-prudential policies is conditioned by several mortgage market characteristics, such as the maturity of loans, interest rate fixity, and tax deductibility of interest payments.

Keywords: Mortgage market; Arrears; Macro-prudential regulation; Institutions (search for similar items in EconPapers)
JEL-codes: C25 D14 E32 G21 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:118:y:2020:i:c:s0378426620301552

DOI: 10.1016/j.jbankfin.2020.105889

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