August 2015

Mortgage Lending and Financial Stability in Asia
Finance sector development

Mortgage lending and financial stability in Asia

Domestic banking crises often originate in the real estate sector. Therefore, one might conclude that mortgage lending is negative for financial stability. However, in normal (noncrisis) periods, mortgage lending may actually contribute to financial stability. This is because mortgage loans have different risk properties from other bank assets such as commercial loans, so having some share of mortgage loans in a bank’s portfolio tends to diversify the risk of that portfolio. Also, because individual mortgage loans are small, they do not contribute much to systemic risk, except in periods of real estate bubbles (IMF 2006).
Rice fields submerged by floods in Pakistan
Social development and protection, Water

Extending the reach of flood insurance

Over the past few weeks, South Asian countries have been suffering torrential rains and devastating floods and landslides, exacerbated by Cyclone Komen, leaving over 100 dead and over a million displaced from Pakistan to Myanmar. The annual monsoon season in the region, normally a lifeline for farmers, this year resulted in floods that have caused severe damage to crops.
Impact of Universal Health Coverage: A Micro-founded Macroeconomic Perspective
Health

Impact of universal health coverage: A micro-founded macroeconomic perspective

Universal health coverage (UHC) has become a key agenda of policy makers in many countries. According to the definition of the World Health Organization (2010), UHC is the goal that “all people have access to health services and do not suffer financial hardship in paying for them.” In most developing countries, the goal of UHC is not easy to reach due to the fact that large, resource-poor populations have limited access to health services. Given that resource-poor people cannot afford out-of-pocket health expenditures, or can only afford them by sacrificing other priorities, a health financing system where people are required to pay for use directly is one of the major barriers to reaching UHC. Although cost sharing is necessary to prevent the overutilization of health services arising from the potential problem of moral hazard, universal coverage is more likely to be reached when the out-of-pocket ratio for direct payment is sufficiently low.
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