Ana Sá (MARKINO) often finds inspiration in her experience working in the banking industry. She is interested in research that entails policy implications on banks’ activity and the credit supply.
In a recent paper, for instance, she assesses the impact of adopting regulations protecting borrowers on new mortgage loans. A case in point is the introduction of statutes preventing banks from seizing assets or income beyond the foreclosed property in case of default (nonrecourse). She exploits differences in mortgage law across U.S. states and finds that despite apparently protecting borrowers, such nonrecourse measures spur banks to impose higher collateral requirements on new loans. In other words, they are associated with higher equity requirements when buying a house, raising obstacles for low-income families.
In another project, she finds evidence that the low-interest rate environment post-2008 led to riskier adjustable-rate mortgages (ARMs) in Portugal. This, for Ana, is an additional cause for concern as interest rates rise. Unlike several other Euro-area countries, ARMs predominate in Portugal, reaching 82% of new mortgage loans granted in 2019. Ana’s research helps us understand that beyond the impact on monetary policy transmission of a heterogeneous distribution of ARMs across Euro-area countries, there is an added risk channel associated with ARMs created in recent years. She worries that ‘asymmetric impacts on mortgage delinquency rates might raise serious challenges to the one-size-fits-all monetary policy of the ECB.’
Ana’s research is primarily empirical, employing microdata from several sources. As an empiricist, she faces the challenges of a never-ending increase in data availability and data analysis techniques. She shares the lessons of her experience, highlighting that ‘no matter how good you are at coding, machine learning, or advanced econometric methods, the first thing you must ensure is that you know your data, how they were compiled and whether they harbour flaws.’
