SFS Cavalcade North America 2026
Darden Graduate School of Business Administration, University of Virginia
May 18-21, 2026
Conference Agenda
Overview and details of the sessions of this conference. Please select a date or location to show only sessions at that day or location. Please select a single session for detailed view (with abstracts and downloads if available).
Please note that all times are shown in the time zone of the conference. The current conference time is: 18th Apr 2026, 05:18:28am EDT
|
Agenda Overview |
| Session | ||
Track TH5-1: Policy Shocks and Regulation
| ||
    | ||
Do GSEs Subsidize Mortgage Lending? The Ohio State University A key function of government-sponsored enterprises (GSEs) is insuring mortgage default risk, yet little is known about whether these guarantees are fairly priced. Using a replicating portfolio and prices of reinsured mortgage default risk to value the cash flows from these guarantees, I show GSEs shifted from providing a 20-bps subsidy pre-GFC to earning risk-adjusted profits of 30-bps post-GFC. Using a regression discontinuity design, I document that this higher pricing is passed to borrowers through higher conforming mortgage rates. Following this increase, banks reduce but still securitize most mortgages through GSEs, implying lenders value GSEs for reasons beyond subsidized funding.
| ||