How does bank capital affect the supply of mortgages? Evidence from a randomized experiment
Valentina Michelangeli () and
No 557, BIS Working Papers from Bank for International Settlements
We study the effect of bank capital on the supply of mortgages. We fully control for endogenous matching between borrowers, loan contracts, and banks by submitting randomized mortgage applications to the major online mortgage broker in Italy. We find that higher bank capital is associated with a higher likelihood of application acceptance and lower offered interest rates; banks with lower capital reject applications by riskier borrowers and offer lower rates to safer ones. Finally, nonparametric estimates of the probability of acceptance and of the offered rate show that the effect of bank capital is stronger when capital is low.
Keywords: Mortgages; banks; household finance; randomized experiment (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban, nep-exp and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (9) Track citations by RSS feed
Downloads: (external link)
http://www.bis.org/publ/work557.pdf Full PDF document (application/pdf)
Working Paper: How does bank capital affect the supply of mortgages? Evidence from a randomized experiment (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bis:biswps:557
Access Statistics for this paper
More papers in BIS Working Papers from Bank for International Settlements Contact information at EDIRC.
Series data maintained by Christian Beslmeisl ().