Credit booms and lending standards : evidence from the subprime mortgage market / prepared by Giovanni Dell'Ariccia, Deniz Igan, and Luc Laeven.

• This paper links the current sub-prime mortgage crisis to a decline in lending standards associated with the rapid expansion of this market. We show that lending standards declined more in areas that experienced larger credit booms and house price increases. We also find that the underlying market structure mattered, with entry of new, large lenders triggering declines in lending standards by incumbent banks. Finally, lending standards declined more in areas with higher mortgage securitization rates. The results are consistent with theoretical predictions from recent financial accelerator models based on asymmetric information, and shed light on the relationship between credit booms and financial instability.

Ämnesord

Subprime mortgage loans  -- United States -- Econometric models. (LCSH)

Credit  -- United States -- Econometric models. (LCSH)

Moral hazard  -- United States -- Econometric models. (LCSH)

Crédit  -- États-Unis -- Modèles économétriques. (Vedettes-matière)

Risque moral  -- États-Unis -- Modèles économétriques. (Vedettes-matière)

Publikations- och innehållstyp

HG3881.5.I58 (LCC)