Macroprudential Regulation of Mortgage Lending

17 Pages Posted: 18 Jan 2016 Last revised: 4 Mar 2016

Date Written: January 18, 2016


Much regulatory effort has been devoted to improving mortgage lending, the principal source of housing finance. To date, that effort has primarily been microprudential — intended to correct market failures in order to increase economic efficiency. In contrast, and while there is some overlap, this article focuses on a more “macroprudential” regulation of mortgage lending — intended to reduce systemic risk. Although largely underdeveloped in the literature, the macroprudential regulation of mortgage lending would have two goals: an ex ante goal of preventing systemic shocks in housing finance and the housing sector, and an ex post goal of ensuring that housing finance, the housing sector, and the financial system more broadly are robust enough to resist contagion and mitigate adverse consequences if and when systemic shocks occur. This article also examines how macroprudential regulation could be designed to try to accomplish these goals.

Suggested Citation

Schwarcz, Steven L., Macroprudential Regulation of Mortgage Lending (January 18, 2016). Southern Methodist University Law Review, Forthcoming, Duke Law School Public Law & Legal Theory Series No. 2016-10, Available at SSRN:

Steven L. Schwarcz (Contact Author)

Duke University School of Law ( email )

210 Science Drive
Box 90362
Durham, NC 27708
United States
919-613-7060 (Phone)
919-613-7231 (Fax)

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