The Impact of Regulation on Mortgage Risk: Evidence from India
52 Pages Posted: 2 Jul 2012 Last revised: 11 Sep 2014
Date Written: September 10, 2014
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 non-performing resulted in substantially lower delinquency probabilities and losses given delinquency.
Keywords: mortgage finance, regulation, regression discontinuity, delinquencies, India
JEL Classification: G21, G28, R21, R31
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