The publication of senior researcher of Kaunas University of Technology (KTU) School of Economics and Business (SEB) on risky loans in minority residential areas has attracted the attention of the London School of Economics and Political Science LSE Business Review and is mentioned in the foreign press.
KTU senior researcher and Principal Economist of the Bank of Lithuania Dr. Swapnil Singh together with researcher Dr. Eglė Jakučionytė (Vilnius University and the Bank of Lithuania) prepared a publication on “How subprime lending emerged in minority neighborhoods”. The publication was presented on the LSE Business Review blog.
It is a commonly held belief that subprime lenders, who issue loans to risky borrowers, provide credit to high-risk communities that would not be able to get credit from low-risk lenders. Eglė Jakučionytė and Swapnil Singh challenge this view. They show that policy changes introduced in 1995 by US institutions increased securitization costs for lending in minority neighborhoods. Prime lenders moved out and, with less competition, subprime lenders managed to enter these minority neighborhoods with greater ease.
“The long-term partnership of KTU School of Economics and Business with the Research Center of the Bank of Lithuania and VU Faculty of Economics and Business Administration allows attracting researchers who have defended economics dissertations in high-level institutions. These researchers contribute to the development of a research culture in the country, and the results of their research published in international high-level scientific journals. It is gratifying that the research of Lithuanian economists is becoming relevant not only to the international academic community, but also to the business community and policy makers in Lithuania and other countries.” – says KTU SEB Vice-Dean for Research Dr. Kęstutis Duoba.
Read the article here.