We study the relationship between new intermediaries and regulatory arbitrage, analyzing marketplace credit around a tightening of mortgage loan-to-value (LTV) caps in several cities in China in 2013. Using novel data covering over 20\% of Chinese marketplace credit as well as the universe of loans and loan applications at a leading online lending platform, we provide evidence consistent with home buyers borrowing online to bypass the tighter LTV cap. Our findings point to new, lightly regulated financial intermediaries as a driver of household leverage, suggesting that they can open nonnegligible regulatory arbitrage channels.This paper was accepted by Victoria Ivashina, finance.

Household credit and regulatory arbitrage: evidence from online marketplace lending

Braggion, Fabio;Manconi, Alberto;
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Abstract

We study the relationship between new intermediaries and regulatory arbitrage, analyzing marketplace credit around a tightening of mortgage loan-to-value (LTV) caps in several cities in China in 2013. Using novel data covering over 20\% of Chinese marketplace credit as well as the universe of loans and loan applications at a leading online lending platform, we provide evidence consistent with home buyers borrowing online to bypass the tighter LTV cap. Our findings point to new, lightly regulated financial intermediaries as a driver of household leverage, suggesting that they can open nonnegligible regulatory arbitrage channels.This paper was accepted by Victoria Ivashina, finance.
2022
Braggion, Fabio; Manconi, Alberto; Zhu, Haikun
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11565/4051212
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