Open Lecture “Mortgage Market and Its Role in Economic Boom and Bust: What can we learn from U.S. experience”

Author: BEROC Visiting Research Professor Elena Loutskina, PhD (University of Virginia)
Topic: Mortgage Market and Its Role in Economic Boom and Bust: What can we learn from U.S. experience
Date and time: July 17, 16:00 - 18:00
Place: IPM Business School
Working language: English.


Do you know what role the mortgage finance plays in economic growth? Why would consumer ability to borrow cheap lead to economic boom? Is it in the interest of a government to stimulate higher housing prices? These and other related topics were discussed in this lecture. We talked about the structure of the U.S. mortgage market including infamous securitization and discussed how it contributed to economic growth miracle pre-2007 crisis. We then evaluated what aspects of the U.S. market contributed to real estate playing an important role in consumer spending decisions and talked about why the market collapse and the ripple effects propagated through the U.S. economy. How can banks mitigate the risk exposure to housing price risk: is it a country level issue that governments need to tackle through regulation and supervision of the financial system? We concluded with a short discussion of U.S. regulatory system successes and failures in managing these risks.