Ms Claudia  Robles-Garcia

Ms Claudia Robles-Garcia

PhD Candidate in Economics

Department of Economics

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About me

Research interests
Industrial Organization (primary)
Finance, Applied Microeconomics (secondary)

Job market paper
Competition and Incentives in Mortgage Markets: The Role of Brokers



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Winner of the CEPR-TFI Household Finance Award, October 2018

Mortgage brokers acting as expert advisors for households often receive commission payments from lenders. This paper empirically analyzes the effects on welfare and market structure of regulations restricting this form of broker compensation. Loan-level data from the universe of UK mortgage originations suggests that: 1) brokers increase upstream competition by facilitating the entry of new, lower-cost lenders; and 2) commission rates distort brokers' advice and generate an agency problem with households. To study the net effect of these forces in equilibrium, I estimate a structural model that features households' demand for both mortgage products and broker services, lenders' optimal pricing decisions, and broker-lender bilateral bargaining over commission rates. I use the estimates to evaluate the impact of policies restricting brokers' commission payments. A ban on commissions leads to a 25% fall in consumer welfare, while a cap equal to the median commission increases consumer surplus by 10%. I find that introducing more restrictive caps decreases broker market power at the expense of increasing lender market power.

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Additional paper

Liquidity, News or Runs? A New Approach to Isolating Depositor Withdrawal Motives

Abstract: 
This paper develops a new approach to isolate and quantify the extent to which deposit withdrawals are due to liquidity, news about fundamentals, or expectations about how other depositors will behave. We use high frequency micro-data on insured time-deposits from a large Greek bank over a long time period that spans quiet periods as well as events with large policy uncertainty. We exploit discontinuities in cost from early withdrawal of time deposits to isolate deposit outflows due to liquidity shocks. In addition, we use variation induced by maturity of time deposits around the large policy uncertainty events to filter deposit withdrawals due to news about fundamentals from those about expectations of other depositor behavior. In quiet times, a decline in €100 of withdrawal cost increases the probability of deposit withdrawals by 30%. In response to a policy uncertainty shock that doubled the short-run CDS price of Greek sovereign bonds, the early deposit withdrawal probability increased 3.6 times, with 1/3rd driven by expectations of other depositor behavior and the rest by news about fundamentals. Our findings shed new light on regulation of deposits.

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Contacts

Placement Officer
Professor Mark Schankerman 

Supervisor
Professor Alessandro Gavazza  

Advisor
Professor Daniel Paravisini  

References
Professor Alessandro Gavazza
Professor Daniel Paravisini
Professor Amit Seru
Professor Margarita Tsoutsoura 

Contact information

Email
c.robles-garcia@lse.ac.uk

Room number
32L.5.01

Office Address
Department of Economics,
London School of Economics and Political Science,
Houghton Street, London WC2A 2AE