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Down payment and indebtedness ratios:how French banks limit their mortgage risks

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  • Dietsch, M.
  • Welter-Nicol, C.

Abstract

French banks habitually use indebtedness ratios when they grant mortgages to households. In France, this policy is not driven by regulatory constraints but allows banks to avoid excessive risk-taking. This issue of Rue de la Banque assesses the effectiveness of these down payment and indebtedness ratios as tools to contain portfolio credit risk.

Suggested Citation

  • Dietsch, M. & Welter-Nicol, C., 2016. "Down payment and indebtedness ratios:how French banks limit their mortgage risks," Rue de la Banque, Banque de France, issue 21, March..
    • Handle: RePEc:bfr:rueban:2016:21
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    File URL: https://publications.banque-france.fr/sites/default/files/medias/documents/rue-de-la-banque_21_2016-03_en.pdf
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    References listed on IDEAS

    as
    1. M. Dietsch & C. Welter-Nicol, 2014. "Do LTV and DSTI caps make banks more resilient?," Débats économiques et financiers 13, Banque de France.
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