Loan-to-Value Policy as a Macroprudential Tool_ The Case of Residential Mortgage Loans in Asia .pdf

Loan-to-Value Policy as a Macroprudential Tool_ The Case of Residential Mortgage Loans in Asia .pdf

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
ADBI Working Paper Series Loan-to-Value Policy as a Macroprudential Tool: The Case of Residential Mortgage Loans in Asia Peter J. Morgan, Paulo José Regis, and Nimesh Salike No. 528 May 2015 Asian Development Bank Institute
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
The Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI’s working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. Suggested citation: Morgan, P., P. J. Regis, and N. Salike. 2015. Loan-to-Value Policy as a Macroprudential Tool: The case of Residential Mortgage Loans in Asia. ADBI Working Paper 528. Tokyo: Asian Development Bank Institute. Available: - paper/2015/05/21/6615.loan.value.policy.macroprudential.tool/ Please contact the authors for information about this paper. Email: [email protected], [email protected], [email protected] Peter J. Morgan is Senior Consultant for Research at the Asian Development Bank Institute (ADBI). Paulo José Regis is an associate professor at Xi’an Jiaotong-Liverpool University, People’s Republic of China. Nimesh Salike is a lecturer at Xi’an Jiaotong- Liverpool University, People’s Republic of China. The views expressed in this paper are the views of the author and do not necessarily reflect the views or policies of ADBI, ADB, its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms. Working papers are subject to formal revision and correction before they are finalized and considered published. Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, Japan Tel: +81-3-3593-5500 Fax: +81-3-3593-5571 URL: E-mail: [email protected] © 2015 Asian Development Bank Institute
Image of page 2
ADBI Working Paper 528 Morgan, Regis, and Salike Abstract Credit creation in the housing market has been a key source of systemic financial risk, and therefore is at the center of the debate on macroprudential policies. The loan-to-value (LTV) ratio is a widely used macroprudential tool aimed at moderating mortgage loan creation, and its effectiveness needs to be estimated empirically. This paper is unique in that it analyzes the effect of LTV on mortgage lending, the direct channel of influence, using a large sample of banks in 10 Asian economies. It uses estimation techniques to deal with the large presence of outliers in the data. Robust-to-outlier estimations show that economies with LTV polices have expanded residential mortgage loans by 6.7% per year, while non-LTV economies have expanded by 14.6%, which suggests LTV policies have been effective.
Image of page 3

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern