Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/111225
Authors: 
Basten, Christoph
Koch, Catherine
Year of Publication: 
2014
Series/Report no.: 
Working Paper Series, University of Zurich, Department of Economics 169
Abstract: 
We examine mortgage pricing before and after Switzerland was the first country to activate the Counter-Cyclical Capital Buffer of Basel III. Observing multiple mortgage offers per request, we obtain three core findings. First, capitalconstrained and mortgage-specialized banks raise their rates relatively more. Second, risk-weighting schemes supposed to discriminate against more risky borrowers do not amplify the effect of higher capital requirements. Third, CCBsubjected banks and CCB-exempt insurers raise mortgage rates, but insurers raise rates by on average 8.8 bp more. To conclude, lenders welcome the opportunity to increase mortgage rates, but stricter capital requirements do not discourage banks from risky mortgage lending.
Subjects: 
Bank Lending
Mortgage Market
JEL: 
G21
E51
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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