Bank Concentration, Mortgage Lending and House Prices

39 Pages Posted: 12 Jun 2019

Date Written: May 28, 2019


This paper studies the link between banks' geographic concentration and the growth in mortgage lending during the boom and bust cycle. Concentrated banks increase their lending relatively less during the boom, and they experience lower reduction in their loans through the ensuing bust. In the aggregate, bank concentration has an impact on the overall credit supply rather than a mere reallocation of lending between concentrated and diversified banks: MSAs with greater exposure to concentrated banks experience less excessive expansion and contraction in mortgage supply during the boom and following bust. As a result, higher bank concentration is associated with less severe boom and bust cycle in house prices.

Keywords: Bank concentration, Mortgage lending, House prices

JEL Classification: G21, G28

Suggested Citation

Dursun-de Neef, H. Özlem, Bank Concentration, Mortgage Lending and House Prices (May 28, 2019). Available at SSRN: or

H. Özlem Dursun-de Neef (Contact Author)

Goethe University Frankfurt ( email )

House of Finance, Campus Westend
Theodor-W.-Adorno-Platz 3
Frankfurt am Main, Frankfurt am Main 60629

Register to save articles to
your library


Paper statistics

Abstract Views
PlumX Metrics