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.
Lien permanent pour cette publication :
publications.gc.ca/pub?id=9.905815&sl=1
| Ministère/Organisme | Bank of Canada, issuing body. |
|---|---|
| Titre | Democratic political economy of financial regulation / by Igor Livshits and Youngmin Park. |
| Titre de la série | Staff working paper = Document de travail du personnel, 1701-9397 ; 2021-59 |
| Type de publication | Série - Voir l'enregistrement principal |
| Langue | [Anglais] |
| Format | Électronique |
| Document électronique | |
| Note(s) | "Last updated: November 26, 2021." Includes bibliographical references (pages 32-34). |
| Information sur la publication | Ottawa, Ontario, Canada : Bank of Canada = Banque du Canada, 2021. ©2021 |
| Auteur / Contributeur | Livshits, Igor, author. |
| Description | 1 online resource (ii, 51 pages). |
| Numéro de catalogue |
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| Descripteurs | Banks and banking -- Risk management -- Econometric models. Interest rates -- Econometric models. Banques -- Gestion du risque -- Modèles économétriques. Taux d'intérêt -- Modèles économétriques. |