Mortgage nation : the 2004 Australian election

A comprehensive study of the historic win by the Howard Coalition Government providing analyses of the campaigns, an insight from the key players at the centre of devising the campaigns and covers election results and their interpretation.

A comparative study of banking in China and India, non-performing loans and the level playing field

It has become common in the literature to compare India and China, two remarkably growing economies, but these comparisons often do not take into account the institutional differences between these two countries. We have in this paper done a comparative analysis of banking institutions in China and India taking into accounts the contentious issue of nonperforming loans along with the issue of use of banks to provide countervailable subsidies to exporting organizations. Our research shows that the efficiency differences between banks in these two countries can be directly related to institutional difference and any comparative study between these countries not taking into consideration these institutional differences may lead to misleading results.

A comparative study of banking in China and India, nonperforming loans and the level playing field

It has become common in literature to compare India and China two remarkably growing economies but these comparisons often do not take into account the institutional differences between two countries. We have in this paper done a comparative analysis of banking institutions in China and India taking into accounts the contentious issue of nonperforming loans along with the issue of use of banks to provide countervailable subsidies to exporting organizations. Our research shows that the efficiency differences between banks in these two countries can be directly related to institutional difference between two countries and any comparative study between two countries not taking into consideration these institutional differences may lead to misleading results.

Financial liberalisation in Vietnam : impact on loans from informal, formal and semi-formal providers

This paper commences with an overview of the Vietnamese financial sector and a survey of the main reforms to this sector implemented since the late 1980s. A descriptive analysis is then provided, which compares some key characteristics of pre- and post-financial reform borrowing and savings activities using the Vietnam Living Standard Surveys of 1992/93 and 1997/98.

Mercado brasileiro de non-performing loans (NPL): uma abordagem teórica e prática na precificação de ativos

O estudo objetiva dar os primeiros passos em direção ao desenvolvimento do campo de distress credit no Brasil via a estimação da taxa de recuperação (liquidação) e sua respectiva precificação. Para isso, foi selecionado o segmento de crédito para pessoa física, inadimplido, com atraso superior a trezentos e sessenta dias que não possuam garantia; ou seja, crédito direto ao consumidor não performado (NPL). No estudo será analisada a dinâmica do ativo e as variáveis que impactam no valor do mesmo, visando a proposição de metodologias e arcabouço teórico para sua precificação.

Information asymmetry and competition in credit markets: the pricing of overdraft loans in Brazil

This paper evaluates how information asymmetry affects the strength of competition in credit markets. A theory is presented in which adverse selection softens competition by decreasing the incentives creditors have for competing in the interest rate dimension. In equilibirum, although creditors compete, the outcome is similar to collusion. Three empirical implications arise. First, interest rate should respond asymmetrically to changes in the cost of funds: increases in cost of funds should, on average, have a larger effect on interest rates than decreases. Second, aggressiveness in pricing should be associated with a worseing in the bank level default rates. Third, bank level default rates should be endogenous. We then verify the validity of these three empirical implications using Brazilian data on consumer overdraft loans. The results in this paper rationalize seemingly abnormallly high interest rates in unsecured loans.

Creditor's protection and bank loans: lack of competition hamprers bankruptcy reform's effects

This dissertation investigates how credit institutions’ market power limits the effects of creditor protection rules on the interest rate and the spread of bank loans. We use the Brazilian Bankruptcy Reform of June/2005 (BBR) as a legal event affecting the institutional environment of the Brazilian credit market. The law augments creditor protection and aims to improve the access of firms to the credit market and to reduce the cost of borrowing. Either access to credit or the credit cost are also determined by bank industry competition and the market power of suppliers of credit. We derive a simple economic model to study the effect of market power interacting with cost of lending. Using an accounting and operations dataset from July/2004 to December/2007 provided by the Brazilian Central Bank, we estimate that the lack of competition in the bank lending industry hinders the potential reducing effect of the BBR on the interest rate of corporate loans by approximately 30% and on the spread by approximately 23%. We also find no statistical evidence that the BBR affected the concentration level of the Brazilian credit market. We present a brief report on bankruptcy reforms around the world, the changes in the Brazilian legislation and on some recent related articles in our introductory chapter. The second chapter presents the economic model and the testable hypothesis on how the lack of competition in the lending market limits the effects of improved creditor protection. In this chapter, we introduce our empirical strategy using a differences-in-differences model and we estimate the limiting effect of market power on the BBR’s potential to reduce interest rates and on the spread of bank loans. We use the BBR as an exogenous event that affects collateralized corporate loans (treatment group) but that does not affect clean consumer loans (control group) to identify these effects, using different concentration measures. In Chapter 3, we propose a two-stage empirical strategy to handle the H–Statistics proposed by Panzar and Rosse as a measure of market competition. We estimate the limiting effects of the lack of competition in replacing the concentration statistics by the H–Statistics. Chapter 4 presents a structural break test of the concentration index and checks if the BBR affects the dynamic evolution of the concentration index.

Resolución 5: Préstamos del Banco Internacional = Resolution 5: Loans by the International Bank for Reconstruction and Development = Résolution 5: Prêts de la Banque Internationale pour la Reconstruction et le Développement

El símbolo E/840/Rev.1 corresponde a la edición bilingüe inglés/francés publicada en 1953

Mortgage securitization and its credit risk control

This dissertation concentrate on the mortgage securitization and its credit risk, which are criticized as the main causes of the financial crisis. From the point of the veiw of mortgage's evolution, the nature, structure and function of mortgage has been radically changed, yet the mortgage law did not give appropriate response to this market change. Meanwhile, the U.S legilslations facilitating the mortgage securitization also have rotten the legal foundations for mortgage market self-regulation and sustained development. In contrast, the EU covered bond system has kept financial stability for 200 years' time, and their statutory approach has been proved to be able to control the credit risk and incentive problems very well, in combination of market self-regulation and public regulation. So the future reform should be directed to strengthen the market's capacity of self-regulation and improve the public regulation. For the development of mortgage securitization in China, it is suggested to introduce the EU covered bond system for the reason of the equilibrium between funding efficiency and financial stability.

Mortgage Lending in Chicago and Los Angeles: A Paired Testing Study of the Pre-Application Process

This paper analyzes data from a recently completed study of discrimination against African-American and Hispanic homebuyers when they visit mortgage lending institutions in two major metropolitan markets to make pre-application inquiries. It represents the first application of paired testing to rigorously measure discrimination in the mortgage lending process. The paired tests isolated significant levels of differential treatment on the basis of race and ethnicity in Chicago with African Americans and Hispanics receiving less information and assistance than comparable whites. Adverse treatment of African-Americans and Hispanics is also observed in Los Angeles for specific treatments, but the overall pattern of treatment observed did not differ statistically from equal treatment. Multivariate analyses for Chicago indicate that large lenders treat minorities more favorably than small lenders and that lenders with substantial numbers of applications from African-Americans treat African Americans more favorably than lenders with predominantly white application pools.