Mortgage Mayhem – Net Interest

Marc Rubinstein has written another really interesting post on the economics of the American mortgage market which you can find here. The post is useful not only for his account of the mechanics of why the American mortgage market is prone to boom and bust but also for reminding us of some of the ways in which the American approach is very different from that employed in other markets. 

Lending to finance home ownership is an increasingly big part of most modern financial systems but the ways in which the process is done differ a lot more than you might think from casual inspection. I have previously flagged a post that Marc did on financing the American home. Read that in conjunction with a post I did on financing the Danish home. Marc also did an interesting post looking at the tension between competition and financial stability.

Tony – From the Outside

Author: From the Outside

After working in the Australian banking system for close to four decades, I am taking some time out to write and reflect on what I have learned. My primary area of expertise is bank capital management but this blog aims to offer a bank insider's outside perspective on banking, capital, economics, finance and risk. View all posts by From the Outside