The Efficiency of Savings-Linked Relationship Lending for Housing Finance PDF Download
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Author: Steffen Kirsch
Publisher:
ISBN:
Category :
Languages : en
Pages :
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We characterize Contractual Saving for Housing (CSH), a widespread and important product of household housing finance in Continental Europe, as relationship lending that is based on information production about borrowers in preceding saving relationships. In a multi-period partial equilibrium model of lending to households, we compare such savings-linked relationship lending with arm's-length lending. Our model shows that savings-linked relationship lending leads to a Pareto improvement or an increase in the allocative efficiency of the financing market compared to arm's-length lending in markets of low time preference or low average borrower quality. In these markets, savings-linked relationship lending can overcome financing market failure due to adverse selection, which is especially true for financing volumes that are large in comparison to households' incomes. Hence, savings-linked relationship lending can in particular support housing purchases of low-income households and is able to increase home ownership rates. Our work provides, to our knowledge, the first theoretical relationship lending explanation for CSH. Further, our results add a novel economic explanation for synergies between the two main activities of traditional commercial banking, deposit-taking and lending.
Author: Steffen Kirsch
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
We characterize Contractual Saving for Housing (CSH), a widespread and important product of household housing finance in Continental Europe, as relationship lending that is based on information production about borrowers in preceding saving relationships. In a multi-period partial equilibrium model of lending to households, we compare such savings-linked relationship lending with arm's-length lending. Our model shows that savings-linked relationship lending leads to a Pareto improvement or an increase in the allocative efficiency of the financing market compared to arm's-length lending in markets of low time preference or low average borrower quality. In these markets, savings-linked relationship lending can overcome financing market failure due to adverse selection, which is especially true for financing volumes that are large in comparison to households' incomes. Hence, savings-linked relationship lending can in particular support housing purchases of low-income households and is able to increase home ownership rates. Our work provides, to our knowledge, the first theoretical relationship lending explanation for CSH. Further, our results add a novel economic explanation for synergies between the two main activities of traditional commercial banking, deposit-taking and lending.
Author: Steffen Kirsch
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Author: Leon T. Kendall
Publisher: Greenwood
ISBN:
Category : Business & Economics
Languages : en
Pages : 198
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Author: Jack Revell
Publisher: Organisation for Economic Co-operation and Development ; [Washington, D.C. : sold by OECD Publications Center]
ISBN:
Category : Housing
Languages : en
Pages : 86
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Author:
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Languages : en
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This paper addresses the question whether close borrower-lender relationships, so called hausbank-relationships, facilitate the funding and beneficial development of SME. To this end, we derive a model which relates a firm's growth rate to its need for external funds and subsequently compute the firms that exceed their predicted growth rate. We then use this measure to identify specific characteristics that are associated with long- and short-term financing of firm growth, in particular the influence of relationship lending. We find that close ties with savings banks predict firms' access to external finance to fund growth. Moreover, the long-term liabilities of firms with hausbank-relationships almost double those with multiple relationships while the overall leverage is about the same. In turn, we find an strong empirical relationship between the provision of long-term funds and firm growth. JEL Classifications: G21, D21
Author: Financial Crisis Inquiry Commission
Publisher: Cosimo, Inc.
ISBN: 1616405414
Category : Political Science
Languages : en
Pages : 692
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Book Description
The Financial Crisis Inquiry Report, published by the U.S. Government and the Financial Crisis Inquiry Commission in early 2011, is the official government report on the United States financial collapse and the review of major financial institutions that bankrupted and failed, or would have without help from the government. The commission and the report were implemented after Congress passed an act in 2009 to review and prevent fraudulent activity. The report details, among other things, the periods before, during, and after the crisis, what led up to it, and analyses of subprime mortgage lending, credit expansion and banking policies, the collapse of companies like Fannie Mae and Freddie Mac, and the federal bailouts of Lehman and AIG. It also discusses the aftermath of the fallout and our current state. This report should be of interest to anyone concerned about the financial situation in the U.S. and around the world.THE FINANCIAL CRISIS INQUIRY COMMISSION is an independent, bi-partisan, government-appointed panel of 10 people that was created to "examine the causes, domestic and global, of the current financial and economic crisis in the United States." It was established as part of the Fraud Enforcement and Recovery Act of 2009. The commission consisted of private citizens with expertise in economics and finance, banking, housing, market regulation, and consumer protection. They examined and reported on "the collapse of major financial institutions that failed or would have failed if not for exceptional assistance from the government."News Dissector DANNY SCHECHTER is a journalist, blogger and filmmaker. He has been reporting on economic crises since the 1980's when he was with ABC News. His film In Debt We Trust warned of the economic meltdown in 2006. He has since written three books on the subject including Plunder: Investigating Our Economic Calamity (Cosimo Books, 2008), and The Crime Of Our Time: Why Wall Street Is Not Too Big to Jail (Disinfo Books, 2011), a companion to his latest film Plunder The Crime Of Our Time. He can be reached online at www.newsdissector.com.
Author: Mr.Eugenio Cerutti
Publisher: International Monetary Fund
ISBN: 1513552074
Category : Business & Economics
Languages : en
Pages : 35
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Book Description
The recent global crisis highlighted the risks stemming from real estate booms. This has generated a growing literature trying to better understand the sources and the risks associated with housing and credit booms. This paper complements and supplements the previous work by (i) exploiting more disaggregated data on credit allowing us to dissociate between firm-credit and household (and in some cases mortgage) credit, and (ii) by taking into account the characteristics of the mortgage market, including institutional as well as other factors that vary across countries. This detailed cross-country analysis offers new valuable insights.
Author: El-hadj M. Bah
Publisher: Springer
ISBN: 1137597925
Category : Business & Economics
Languages : en
Pages : 285
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Book Description
This open access book utilizes new data to thoroughly analyze the main factors currently shaping the African housing market. Some of these factors include the supply and demand for housing finance, land tenure security issues, construction cost conundrum, infrastructure provision, and low-cost housing alternatives. Through detailed analysis, the authors investigate the political economy surrounding the continent’s housing market and the constraints that behind-the-scenes policy makers need to address in their attempts to provide affordable housing for the majority in need. With Africa’s urban population growing rapidly, this study highlights how broad demographic shifts and rapid urbanization are placing enormous pressure on the limited infrastructure in many cities and stretching the economic and social fabric of municipalities to their breaking point. But beyond providing a snapshot of the present conditions of the African housing market, the book offers recommendations and actionable measures for policy makers and other stakeholders on how best to provide affordable housing and alleviate Africa’s housing deficit. This work will be of particular interest to practitioners, non-governmental organizations, private sector actors, students and researchers of economic policy, international development, and urban development.
Author: United States. Congress. Senate. Committee on Banking and Currency
Publisher:
ISBN:
Category :
Languages : en
Pages : 110
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Author: Gary Whalen
Publisher:
ISBN:
Category : Bank loans
Languages : en
Pages : 42
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Book Description
