Large Banks and Efficient Banks: How Do They Influence Credit Supply and Default Risk?

摘要: This study addresses two related questions. First, how does market structure influence a bank’s decision to originate new residential single-family home mortgages? Second, is mortgage default risk affected by concentration? We use data on banks and mortgages in non-agency securitization pools for the period from 1999 2008 explore these adopt two-stage approach test effects of banking credit supply across ZIP code areas. find that operating markets with low entry barriers (efficient banks) increase supply, while possessing power restrict markets. Banks loans have lower compared originated competitive Efficient technology indiscriminately even at expense lowering quality (increasing risks). also show are not correlated legislation risks population size markets.