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| Type | Working Paper |
| Scope | Discipline-based scholarship |
| Title | Higher bank capital requirements and mortgage pricing: evidence from the Counter-Cyclical Capital Buffer |
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| Institution | University of Zurich |
| Series Name | Working paper series / Department of Economics |
| Number | 169 |
| ISSN | 1664-7041 |
| Number of Pages | 59 |
| Date | 2014 |
| Abstract Text | 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, CCB-subjected 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. |
| Official URL | http://www.econ.uzh.ch/static/wp/econwp169.pdf |
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| Keywords | Bank lending, mortgage market, Immobilienmarkt, Kredit, Kreditmarkt, Hypothek, Hypothekenzins, Eigenkapital, Regulierung |