Mortgage Securities in Emerging Markets
Despite its recognized economic and social importance, housing finance often remains underdeveloped in emerging economies. Residential lending remains small, poorly accessible, and depository-based. Lenders remain vulnerable to significant credit,...
| Main Authors: | , , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2004/08/5066104/mortgage-securities-emerging-markets http://hdl.handle.net/10986/14159 |
| Summary: | Despite its recognized economic and
social importance, housing finance often remains
underdeveloped in emerging economies. Residential lending
remains small, poorly accessible, and depository-based.
Lenders remain vulnerable to significant credit, liquidity,
and interest rate risks. As a result, housing finance is
relatively expensive and often rationed. The importance of
developing robust systems of housing finance is paramount as
emerging economy governments struggle to cope with
population growth, rapid urbanization, and rising
expectations from a growing middle class. The capital
markets in many economies can provide an attractive and
potentially large source of long-term funding for housing,
and solutions to better allocate part of the risks. The
advent of institutional investors is creating large and
rapidly growing pools of funds that may facilitate the
development of mortgage-related securities. Despite such a
strong appeal, there are significant barriers to the
development of mortgage securities in emerging markets.
Their success is dependent on many factors, starting with a
strong legal and regulatory framework and liberalized
financial sector, and including a developed primary mortgage
market. The experience in developing mortgage securities in
emerging markets has been mixed. The authors review the
experience of introducing mortgage securities in emerging
markets and explore the policy issues related to this theme. |
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