1 / 8

Housing finance,post sub-prime

Housing finance,post sub-prime. Presentation at NHB – APUHF –APMCHUD Conference 12 April 2013, New Delhi M ythili Bhusnurmath , Consulting Editor, Economic Times. Responsible borrowing &lending. Three tenets:

jill
Télécharger la présentation

Housing finance,post sub-prime

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Housing finance,post sub-prime Presentation at NHB – APUHF –APMCHUD Conference 12 April 2013, New Delhi MythiliBhusnurmath, Consulting Editor, Economic Times

  2. Responsible borrowing &lending Three tenets: • Responsible borrowing & lending are two sides of the same coin • Neither is possible unless you have a stable macro-economic environment • Third, while the first tenet seems to have been learnt somewhat, on the second, we still have a long way to go: eg repeated bouts of quantitative easing

  3. Valuable learnings: for policy makers & financial sector players • Black swans are not a figment of the imagination; tail events do happen and then can cause untold havoc. • Financial crises are inevitable in free market economies • Human beings cannot be reduced to equations; days of rocket science are over • Economics is a social science NOT a physical science : There is no pat thumb rule for bubbles

  4. Lessons for policy makers Markets are poor judges of impending crises; they often ignore warning signals • Macro-economic stability is a public good & onus rests on policy makers • Policy makers are part of the problem • Regulators should get rid of their inferiority complex vis-à-vis players; re-naming a product doesn’t make it new

  5. More Lessons for policy makers • Build in checks & balances before not after • Recognise need for players to have skin in the game • Ensure healthy loan-to-value ratios; risk weights take into account macro economic fundamentals such as asset-price inflation & exposure limits are dynamic • Inclusive housing cannot be at the cost of responsible lending

  6. Learnings for players • Banks are about trust; it takes years to build reputations ; only an instant to destroy them • Old world skills of knowing borrower must be re-learnt, documents can never be a substitute   • Sounds almost Biblical but there is always a come uppance for the unethical.

  7. Recent Developments: India • Renewed emphasis on macro-prudential aspects & lately consumer protection • Basle III? • Mortgage backed securities with adequate safeguards • Strict guidelines for Mortgage Guarantee Cos.; 1st IMGC • Fresh impetus to CIBIL

  8. Final Note Better safe than sorry, especially in poor, emerging markets : so when in doubt err on the side of caution cos • The future ain’t what it used to be Yogi Berra Thank You

More Related