Lending on hold: Regulatory uncertainty and bank lending standards

Stefan Gissler, Jeremy Oldfather and Doriana Ruffino

Journal of Monetary Economics, 2016, vol. 81, issue C, 89-101

Abstract: The 2011–2013 rule-making process for the regulation of qualified mortgages was correlated with a reduction in mortgage lending. In this paper, we document this correlation at the bank level. Using a novel measure of banks׳ perception of regulatory uncertainty, we offer suggestive evidence that banks that perceived higher regulatory uncertainty (or that were more adverse to it) reduced lending more severely. Other channels that might explain banks׳ lending behavior–investment/securitization, putbacks by government sponsored enterprises, and general economic uncertainty–are also considered.

Keywords: Policy uncertainty; Credit cycles; Qualified mortgages (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (49)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:81:y:2016:i:c:p:89-101

DOI: 10.1016/j.jmoneco.2016.03.011

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