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

Ramadorai, Tarun, Campbell, John and Ranish, Ben (2013) How Do Regulators Influence Mortgage Risk? Evidence from an Emerging Market. University of Oxford.

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Abstract

We employ loan-level data on over a million loans disbursed in India between 1995 and 2010 to understand how fast-changing regulation impacted mortgage lending and risk. Our methodology offers an alternative to regression discontinuity analysis that applies even when regulations create no discontinuities in the cross-section. We use cross-sectional differences in the time-series variation of delinquency rates, conditional on initial interest rates, to detect the effects of regulations favoring smaller loans. We also find that a change in the classification of non-performing assets reduced both delinquency probabilities and losses given delinquency.

Item Type: Other Working Paper
Keywords: mortgage lending; India
Subject(s): Finance
Centre: Faculty of Finance
Date Deposited: 23 Sep 2013 10:00
Last Modified: 23 Oct 2015 14:08
URI: http://eureka.sbs.ox.ac.uk/id/eprint/4770

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