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Stakeholders' aversion to inequality and bank lending to minorities

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Bibliographic Details
Authors and Corporations: Crosignani, Matteo (Author), Le, Hanh (Author)
Other Authors: Le, Hanh [Author]
Type of Resource: E-Book
Language: English
published:
Series: Federal Reserve Bank of New York: Staff reports ; no. 1079 (November 2023)
Subjects:
inequality aversion
mortgage lending
minority borrowers
racial discrimination
Graue Literatur
Source: Verbunddaten SWB
Lizenzfreie Online-Ressourcen
Description
Summary: We find that banks differ in their propensity to lend to minorities based on their stakeholders' aversion to inequality. Using mortgage application data collected under the Home Mortgage Disclosure Act, we document a large and persistent cross-sectional variation in banks' propensity to lend to minorities. Inequality-averse banks have a higher propensity to lend to borrowers in high-minority areas and, within census tracts, to non-white borrowers compared to other banks. This higher propensity (i) is not explained by selection of applicants, (ii) allows these banks to retain and attract their inequality-averse stakeholders, and (iii) does not predict worse ex-post loan performance.
Physical Description: 1 Online-Ressource (circa 56 Seiten); Illustrationen
DOI: 10.59576/sr.1079