Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/243309 
Year of Publication: 
2021
Citation: 
[Journal:] KDI Journal of Economic Policy [ISSN:] 2586-4130 [Volume:] 43 [Issue:] 3 [Publisher:] Korea Development Institute (KDI) [Place:] Sejong [Year:] 2021 [Pages:] 1-32
Publisher: 
Korea Development Institute (KDI), Sejong
Abstract: 
With CB data in South Korea, this study examines whether the credit risk of borrowers changes when the regulation on bank mortgage supply is relaxed. We analyze the effect of deregulation on LTV and DTI limits in the Seoul-metropolitan area in August 2014 with a differencein-difference approach. We find that the probability of delinquency is lower in the Seoul metropolitan area after the deregulation than in other urban areas. The effect is noticeable among low-income and low-credit borrowers. We also find that borrowers change their debt structure to reduce the interest costs utilizing their improved access to bank mortgages. The findings suggest the necessity to consider the burden of the high interest costs of unsecured loans for debtors with low incomes and low credit ratings in designing housing finance regulations.
Subjects: 
LTV
DTI
Mortgage Loan
Credit Risk
JEL: 
G28
G51
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-sa Logo
Document Type: 
Article

Files in This Item:
File
Size
735.38 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.