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Identifier to cite or link to this item: https://hdl.handle.net/10086/27736

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Title
Lending Pro-Cyclicality and Macro-Prudential Policy: Evidence from Japanese LTV Ratios
Creator
Creator Name
Ono, Arito Ono, Arito
Affiliation
Affiliation Name
Chuo University
Creator Name
Uchida, Hirofumi Uchida, Hirofumi
Affiliation
Affiliation Name
Kobe University
Creator Name
Udell, Gregory F. Udell, Gregory F.
Affiliation
Affiliation Name
Indiana University
Creator Name
Uesugi, Iichiro Uesugi, Iichiro
Affiliation
Affiliation Name
Hitotsubashi University
Key Word
loan-to-value (LTV) ratios
pro-cyclicality
macro-prudential policy
bubble
JEL
G28
R33
G21
G32
Abstract
Using a unique micro dataset compiled from the real estate registry in Japan, we examine more than 400,000 loan-to-value (LTV) ratios for business loans to draw implications for the efficacy of caps on LTV ratios as a macro-prudential policy measure. We find that the LTV ratio exhibits counter-cyclicality through the business cycle. We also find that borrowers obtaining high-LTV loans performed no worse ex-post than those with lower LTV loans. Our findings imply that a fixed cap on LTV ratios might not only be ineffective in curbing loan volume in boom periods but also inhibit well-performing firms from borrowing.
Publisher
Institute of Economic Research, Hitotsubashi University
Issued Date
2016-02
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
HIT-REFINED Working Paper Series ; No. 41
Number of Pages
52
Sponsorship
基盤研究(S) = Grants-in-Aid for Scientific Research (S)
Appears in Collections
Working Paper Series / Real Estate Markets, Financial Crisis, and Economic Growth An Integrated Economic Approach
URL
https://hdl.handle.net/10086/27736