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)
Campbell, John Y., Tarun Ramadorai, and Benjamin Ranish.
"The Impact of Regulation on Mortgage Risk: Evidence from India."
American Economic Journal: Economic Policy,
Household Saving; Personal Finance
Banks; Depository Institutions; Micro Finance Institutions; Mortgages
Financial Institutions and Services: Government Policy and Regulation
Economics of Regulation
Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
Housing Supply and Markets