How Do Regulators Influence Mortgage Risk: Evidence from an Emerging Market

John Campbell, Tarun Ramadorai and Benjamin Michael Ranish

Scholarly Articles from Harvard University Department of Economics

Abstract: To understand the effects of regulation on mortgage risk, it is instructive to track the history of regulatory changes in a country rather than to rely entirely on cross- country evidence that can be contaminated by unobserved heterogeneity. However, in developed countries with fairly stable systems of financial regulation, it is difficult to track these effects. We employ loan-level data on over a million loans disbursed in India over the 1995 to 2010 period to understand how fast-changing regulation impacted mortgage lending and risk. We use cross-sectional differences in the time- series variation of delinquency rates, conditional on initial interest rates, to detect the effects of regulation on mortgage delinquencies.

Date: 2012
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Citations: View citations in EconPapers (9)

Published in NBER Working Paper Series

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http://dash.harvard.edu/bitstream/handle/1/1216817 ... Appendix09082012.pdf (application/pdf)
http://dash.harvard.edu/bitstream/handle/1/1216817 ... tgageRisk08sep12.pdf (application/pdf)
http://dash.harvard.edu/bitstream/handle/1/12168178/EmpiricalAppendix090812.pdf (application/pdf)

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Working Paper: How Do Regulators Influence Mortgage Risk? Evidence from an Emerging Market (2012)
Working Paper: How Do Regulators Influence Mortgage Risk: Evidence from an Emerging Market (2012)
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