Discussion of 'Financial innovation and European housing and mortgage markets', by David Miles and Vladimir Pillonca

摘要

Although their paper stresses the potential merits of a particular financial innovation-a form of shared-ownership indexed contract-Miles and Pillonca surprisingly neglect the role of differential surges of financial innovation in explaining cross-country differences in house-price inflation. The risk-reducing potential of their favoured instrument deserves further analysis, not least because of the sizeable political risk involved: the experience of several other countries that have used indexed mortgage contracts shows their limited robustness to macroeconomic shocks.