The Impact of Regulation on Mortgage Risk: Evidence from India

52 Pages Posted: 2 Jul 2012 Last revised: 11 Sep 2014

See all articles by John Y. Campbell

John Y. Campbell

Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Tarun Ramadorai

Imperial College London; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Benjamin Ranish

Board of Governors of the Federal Reserve System

Multiple version iconThere are 2 versions of this paper

Date Written: September 10, 2014

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 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

Suggested Citation

Campbell, John Y. and Ramadorai, Tarun and Ranish, Benjamin, The Impact of Regulation on Mortgage Risk: Evidence from India (September 10, 2014). Available at SSRN: https://ssrn.com/abstract=2097828 or http://dx.doi.org/10.2139/ssrn.2097828

John Y. Campbell

Harvard University - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Tarun Ramadorai (Contact Author)

Imperial College London ( email )

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HOME PAGE: http://www.tarunramadorai.com

Centre for Economic Policy Research (CEPR) ( email )

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European Corporate Governance Institute (ECGI) ( email )

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Belgium

Benjamin Ranish

Board of Governors of the Federal Reserve System ( email )

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Washington, DC 20551
United States

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