Description: Banks love housing booms because they offer attractive returns on investment. But they also get preoccupied with real estate during those boom times at the cost of lending to other parts of the economy, according to research by Wharton finance professor Itay Goldstein, Miami Business School finance professor Indraneel Chakraborty, and Virginia Tech professor Andrew MacKinlay.

Source: https://knowledge.wharton.upenn.edu/

Date: Sep 27, 2022

Link: https://knowledge.wharton.upenn.edu/article/how-banks-crowd-out-commercial-lending-during-real-estate-booms/?utm_campaign=KatW2022&utm_medium=email&utm_source=kw_campaign_monitor&utm_term=9-28-2022&utm_content=How_Banks_Crowd_Out_Commercial_Lending_During_Real_Estate_Booms

Questions for discussion:

• What does the report say about the reasons banks love real estate booms?
• What else does the research say?
• What does this mean in terms of investment in banks today?