Financial Innovations and the Stability of the Housing Market. (November 2014)

• Record Type: Journal Article
• Authors: Allen, Franklin; Barth, James R.; Yago, Glenn
• Is Part Of: National Institute economic review. Volume 230:Number 1(2014)
• Page Start: R16
• Page End: R33
• Publication Date: 2014-11
• Subjects: mortgages -- housing finance institutions -- covered bonds -- securitisation; G01 -- G21 -- G23 -- G28; Economic history -- 1945- -- Periodicals; Economics -- Great Britain -- Periodicals; Great Britain -- Economic conditions -- 1945-1964 -- Periodicals; 330.941
• DOI: 10.1177/002795011423000103
• Languages: English
• ISSNs: 0027-9501

Abstract

The recent crisis has underlined the importance of the interaction of financial innovations and the housing market. We consider five major innovations relevant to housing finance. These are (i) mortgages; (ii) specialised housing finance institutions; (iii) government interventions in housing finance in the US during the Great Depression; (iv) covered bonds; and (v) securitised mortgages. The history of these innovations and their positive and negative aspects are discussed. Future innovations to help the stability of the housing market are also suggested.