Critics of the federal government's role in the mortgage markets often claim the United States is unique among developed countries in providing significant guarantees for home mortgage financing. A corollary to this critique is that European countries do not provide government guarantees for...

As major reforms of the U.S. housing finance system are contemplated, many have begun to question whether public policy should continue to emphasize the 30-year fixed-rate mortgage, the pillar of modern U.S. housing finance.As this paper argues, there are three major arguments in favor of...

Many conservatives want to remove the government's role from the U.S. housing finance system, leaving private markets to meet the mortgage needs of U.S. residential home buyers. Looking at our country's history and the experience of many other countries starkly illustrate the flaws inherent in...

The election of Donald Trump alongside libertarian majorities in the House and Senate is likely to jumpstart housing finance reform efforts, and it appears almost certain that the federal government's role in housing finance will be significantly reduced. A number of legal and economic analyses...

“Market discipline” — the notion that short-term creditors can efficiently rein in bank risk — has been a central pillar of banking regulation since the late 1980s, both in the United States and abroad. While market discipline did not prevent the buildup of bank risk that caused the...

Written testimony on the question of whether the recent settlements negotiated by the U.S. Department of Justice with various financial institutions alleged to have engaged in fraud and misrepresentation related to the structuring and sale of residential mortgage-backed securities bypassed...

Congress and federal financial regulators have long prioritized the safety and soundness of banking firms. But at the same time, the directors and officers of banking firms are legally bound to prioritize shareholder wealth maximization, which creates incentives for risk-taking that work against...