Misaligned Incentives and Mortgage Lending in Asia
Roberto Mariano (),
Andrey Pavlov and
Susan Wachter ()
Additional contact information
Richard Green: SMU
Authors registered in the RePEc Author Service: Richard Green () and
Richard C. Green
Microeconomics Working Papers from East Asian Bureau of Economic Research
This paper provides a conceptual basis for the price discovery potential for tradable market instruments and specifically the development of mortgage securitization in Asia and the potential dangers of such markets. Nonetheless we argue for the potential importance of securitization in Asia because of its possible role in increasing transparency of the financial sector of Asian economies. We put forth a model explaining how misaligned incentives can lead to bank generated real estate crashes and macroeconomic instability, with or without securitization under certain circumstances. We examine the banking sectors performance in Asia compared to securitized real estate returns, to provide evidence on the contribution of misaligned incentives in the past. We discuss how the addition of liquid MBS could help to inoculate markets from the shocks arising from bank-financed mortgage lending. We conclude with a brief discussion of current MBS markets in Asia.
Keywords: tradable market instruments; price discovery; mortgage securitization; dangers; Transparency; MBS markets (search for similar items in EconPapers)
JEL-codes: G20 G21 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.eaber.org/node/22422 [301 Moved Permanently]--> https://www.eaber.org/node/22422 [301 Moved Permanently]--> https://eaber.org/node/22422)
Chapter: Misaligned Incentives and Mortgage Lending in Asia (2009)
Working Paper: Misaligned Incentives and Mortgage Lending in Asia (2009)
Working Paper: Misaligned Incentives and Mortgage Lending in Asia (2007)
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:eab:microe:22422
Access Statistics for this paper
More papers in Microeconomics Working Papers from East Asian Bureau of Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Shiro Armstrong ().