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Please note that all times are shown in the time zone of the conference. The current conference time is: 16th June 2024, 12:39:02pm EDT
Track M4-2: Monetary Policy and Banking Supervision
Time:
Monday, 20/May/2024:
9:30am - 10:15am
Session Chair: Lu Liu, University of Pennsylvania Discussant: Christopher Hansman, Emory University
Location:Room 548
Presentations
Spatially Targeted LTV Policies and Collateral Values
Chun-Che Chi1, Cameron LaPoint2, Ming-Jen Lin3
1Academia Sinica, Institute of Economics; 2Yale School of Management; 3National Taiwan University
Governments regulate household leverage at a national level, even when credit and housing market conditions vary across locations. We document that loan-to-value limits targeting specific neighborhoods can curb local house price growth. We combine administrative data from Taiwan covering the universe of mortgages, personal income tax returns, geocoded housing transactions, and bank balance sheets. Applying matched difference-in-differences and border difference-in-discontinuity designs, we find leverage limits are effective at persistently reducing local house prices in expensive, high-income neighborhoods, without reducing delinquency or inducing mortgage credit rationing. Consumers avoid place-based mortgage restrictions by obtaining inflated appraisals and moving to less regulated areas.