We study how bank loan rates responded to a 50% increase in capital requirements for a subcategory of construction lending, High Volatility Commercial Real Estate (HVCRE). To identify this effect, we exploit variation in the loan terms determining whether a loan is classified as HVCRE and the time that a treated loan would be subject to the increased capital requirements. We estimate that the HVCRE rule increases loan rates by about 40 basis points for HVCRE loans, indicating that a one percentage point increase in required capital raises loan rates by about 9.5 basis points.
Banks, life insurers, and commercial mortgage-backed securities (CMBS) lenders originate the vast majority of U.S. commercial real estate (CRE) loans. While these lenders compete in the same market, they differ in how they are funded and regulated, and therefore specialize in loans with different characteristics. We harmonize loan-level data across the lenders and review how their CRE portfolios differ. We then exploit cross-sectional differences in loan portfolios to estimate a simple model of frictional substitution across lender types. The substitution patterns in the model match well the observed shift of borrowers away from CMBS when CMBS spreads rose in 2016.
Specialised rehabilitation units offer inpatient multi-disciplinary rehabilitation for individuals with severe and enduring mental illness. A cornerstone of therapy is the work in the community through further education and community organisations. However, coronavirus restrictions have meant that such external supports are no longer available for the duration of the crisis. This has led to opportunities for developing new ways of offering rehabilitation within hospital environments. This article describes some of the new initiatives developed. The benefits of the lockdown for service users are also discussed. Many found the cessation of visits from family members with whom they had an ambivalent relationship helpful. The lockdown improved relationships between patients on the unit and encouraged a greater feeling of community. The lockdown has also emphasised the importance of team self-awareness and an awareness of the nature of the treatments offered.
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