Democratic political economy of financial regulation / by Igor Livshits and Youngmin Park.: FB3-5/2021-59E-PDF
"This paper offers a simple theory of inefficiently lax financial regulation arising as an outcome of a democratic political process. Lax financial regulation encourages some banks to issue risky residential mortgages. In the event of an adverse aggregate housing shock, these banks fail. When banks do not fully internalize the losses from such failure (due to limited liability), they offer mortgages at less than actuarially fair interest rates. This opens the door to homeownership for young, low net-worth individuals. In turn, the additional demand from these new home-buyers drives up house prices"--Abstract.
Permanent link to this Catalogue record:
publications.gc.ca/pub?id=9.905815&sl=0
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| Title | Democratic political economy of financial regulation / by Igor Livshits and Youngmin Park. |
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| Publication type | Monograph - View Master Record |
| Language | [English] |
| Format | Digital text |
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| Description | 1 online resource (ii, 51 pages). |
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