Conference on Mortgage Contract Design: Implications for Households, Monetary Policy, and Financial Stability

May 20-21, 2015

Post Conference Blog Post: Rethinking Mortgage Design by John Campbell, Andreas Fuster, David Lucca, Stijn Van Nieuwerburgh, and James Vickery

A conference sponsored by the Federal Reserve Bank of New York in association with the NYU Stern School of Business Center for Real Estate Finance Research and the Journal of Financial Economics


The design of mortgage contracts varies strikingly across countries and through time, in terms of interest rate sensitivity, callability, maturity and other dimensions. For example, long‐term prepayable fixed‐rate mortgages predominate in the US and Denmark, while variable‐rate contracts tied to short‐term interest rates are popular in the UK, Canada, Australia and a number of other countries. These differences reflect a variety of factors ranging from household preferences to housing finance regulation, and have important implications for monetary policy transmission, financial stability, household finance and portfolio choice.

This two-day conference aims to stimulate discussion among academics, policy makers, and practitioners about the causes and consequences of mortgage contract design. The first day will focus on academic research. The second will focus on policy presentations and panel discussions.

If you would like additional information please contact jnegreir@stern.nyu.edu

Conference Location: Federal Reserve Bank of New York, 33 Liberty Street, New York, NY 


Agenda

May 20 (1st Floor, Liberty Room)

8:30 am:  
Registration and coffee

9:00 am:  
Welcome remarks

9:15 am:  
Leonardo Gambacorta (Bank for International Settlements)
Luigi Guiso (Einaudi Institute for Economics and Finance)
Paolo Emilio Mistrulli (Banca d’Italia)

Discussant:
Manuel Adelino (Duke University)

10:15 am:

Discussant:
Stijn Van Nieuwerburgh (NYU Stern School of Business)

11:30 am:
"Efficient Credit Policies in a Housing Debt Crisis"
(Presentation) PDF
Janice Eberly (Kellogg School of Management, Northwestern University) 
Arvind Krishnamurthy (Stanford Graduate School of Business)
 
Discussant:
Deborah Lucas (MIT Sloan School of Management)

1:30 pm:
Amir Kermani (Haas School of Business, UC Berkeley)
Rodney Ramcharan (Federal Reserve Board)

"Mortgage Rates, Household Balance Sheets, and the Real Economy"
(Presentation) PDF
Benjamin Keys (Harris School of Public Policy, University of Chicago)
Tomasz Piskorski (Columbia Business School)
Amit Seru (Chicago Booth School of Business)
Vincent Yao (Fannie Mae)

Discussant (for both papers):
Christopher Carroll (CFPB, Johns Hopkins University)

2:50 pm:

Discussant:
Gauti Eggertsson (Brown University)

4:00 pm:
Steffen Andersen (Copenhagen Business School) 
John Campbell (Harvard University)
Kasper Meisner-Nielsen (Hong Kong University of Science and Technology) 
Tarun Ramadorai (Saïd Business School, University of Oxford)

Discussant:
Susan Woodward (Sand Hill Econometrics)

5:00-6:30 pm:
Informal gathering at Pound & Pence Pub, 55 Liberty St, New York

May 21 (10th Floor, Benjamin Strong Room)

8:30 am:
Registration and coffee

9:00 am:
Jamie McAndrews (Executive Vice President and Director of Research, Federal Reserve Bank of New York)

9:15 am
Panel A: Borrower Perspective
Panelists will discuss the importance of mortgage design from the perspective of household finance and household risk management.

Panelists:
Joao Cocco (Professor of Finance, London Business School)
Susan Wachter (Professor of Finance, Wharton School)
Paul Willen (Senior Economist and Policy Advisor, Federal Reserve Bank of Boston)
Mitria Wilson (Vice President, Center for Responsible Lending)
Barry Zigas (Director of Housing Policy, Consumer Federation of America)

Moderator:
Joseph Tracy (Executive Vice President and Senior Advisor to the President, Federal Reserve Bank of New York)

11:00 am
Panel B: Mortgage Funding
Panelists will focus on how different types of mortgage products can be funded in capital markets.

Panelists:
Timothy Andrew (Vice President, Wells Fargo Home Mortgage)
Jesper Berg (Senior Vice President, Nykredit)
Matt Jozoff (Managing Director, JP Morgan)
Andrew Peskin (Senior Vice President, Wells Fargo Home Mortgage)
Nancy Wallace (Professor of Real Estate, Haas School of Business, UC Berkeley)
Moderator:
Patricia Mosser (Deputy Director for Research and Analysis, Office of Financial Research)

12:15 pm
(1st Floor, Liberty Room)
Lunch and Keynote Speech by Atif Mian (Professor of Economics, Princeton University)

1:30 pm
Panel C: Implications for Monetary Policy and Financial Stability
Panelists will share views on how mortgage contract design affects the implementation of monetary policy, as well as financial stability, in the U.S. and other countries.

Panelists:
Karen Dynan (Assistant Secretary for Economic Policy and Chief Economist, U.S. Treasury Department)
William English (Senior Adviser to the Board, Federal Reserve Board)
David Miles (Member of the Monetary Policy Committee, Bank of England)
Lars Svensson (Visiting Professor, Stockholm School of Economics)

Moderator:
John Campbell (Professor of Economics, Harvard University)

3:15 pm
Panel D: Financial Innovation
Panelists will present alternative designs for mortgage contracts, and discuss potential frictions in their implementation.

Panelists:
Andrew Caplin (Professor of Economics, New York University)
Howell Jackson (Professor of Law, Harvard Law School)
Andrew Kalotay (President, Andrew Kalotay Associates)
Edward Pinto (Resident Fellow, American Enterprise Institute)

Moderator:
Andreas Fuster (Senior Economist, Federal Reserve Bank of New York)

4:30 pm:
Reception (1st Floor, East Wing)