What Fuels the Boom Drives the Bust: Regulation and the Mortgage Crisis

• 成果类型: Article
• 署名作者: Dagher, Jihad; Fu, Ning
• 署名单位: International Monetary Fund; Harvard University
• 刊物名称: ECONOMIC JOURNAL
• ISSN/ISSBN: 0013-0133
• DOI: 10.1111/ecoj.12353
• 发表日期: 2017
• 页码: 996-1024
• 关键词: antipredatory lending laws; Bank risk-taking; state; securitization; IMPACT

摘要

The weakly regulated independent mortgage companies (IMCs) had a vastly disproportional contribution to the expansion in risky credit during the mortgage boom and to the ensuing foreclosure crisis. We exploit a quasi-experimental setting, created by the inconsistency of state lender regulations between banks and IMCs and their heterogeneity across states, to isolate the impact of regulation on lending standards using county-pairs straddling state borders. We find that weaker state regulation of IMCs is associated with a sharper expansion of IMCs, particularly in risky high-yield loans, which were also of worse quality in the weakly regulated states, based on subsequent delinquency.