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  3. American Economic Journal: Economic Policy
  4. November 2015
  5. The Impact of Regulation on Mortgage Risk: Evidence from India

The Impact of Regulation on Mortgage Risk: Evidence from India

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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 paper uses changes in regulatory treatment discontinuities associated with loan size and leverage to detect regulation-induced loan delinquencies. We also find that an acceleration in the classification of assets as nonperforming resulted in substantially lower delinquency probabilities and losses given delinquency. (JEL D14, G21, G28, L51, O16, R31)

Citation

Campbell, John Y., Tarun Ramadorai, and Benjamin Ranish. 2015. "The Impact of Regulation on Mortgage Risk: Evidence from India." American Economic Journal: Economic Policy, 7 (4): 71-102. DOI: 10.1257/pol.20130220

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JEL Classification

  • D14 Household Saving; Personal Finance
  • G21 Banks; Depository Institutions; Micro Finance Institutions; Mortgages
  • G28 Financial Institutions and Services: Government Policy and Regulation
  • L51 Economics of Regulation
  • O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
  • R31 Housing Supply and Markets
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