The #InternationalMonetaryFund can see the systemic risks. They have a global view of Housing Finance and Real-Estate Booms: A Cross-Country Perspective, see here: https://www.imf.org/external/pubs/ft/sdn/2015/sdn1512.pdf.I think that the IMF would agree with: "The Rice Warner submission said advice regarding the type, structure and term of a mortgage needed to recognize the other long term financial commitments and aspirations" This is why:The IMF have issued an alert by way of a blog post about using #Fintechto manage risk better https://blogs.imf.org/.../fintech-capturing-the-benefits....... Globally, this is the main risk that they would be aiming this blog post at in my opinion: http://5starinnovation.com/hamburg-g20-leaders....... .This is a robust global public debate that needs to be conducted because it is about whether lenders owe a duty of care to borrowers about interest rate risk management AND THE BORROWER'S PERSONAL BUDGET. This debate should also extend to mortgage insurance as to whether optional additional mortgage insurance to cover the difference between proceeds of a mortgagee's auction and the lenders valuation should be part of a loan's structure i.e. Principal, interest, fees, personal insurance and customers mortgage insurance to cover mortgagee's sale proceeds gap. Currently, people are being bankrupted over this issue.Fintech can clearly manage the interest rate risk better and the International Monetary Fund would see this, see here:In 2015 Eugenio Cerutti, Jihad Dagher and Giovanni Dell’Ariccia published an IMF Staff Discussion Note entitled Housing Finance and Real-Estate Booms: A Cross-Country Perspective. Their reference for the report is SDN/15/12. This is a valuable resource for The Regulators because it looks at the issue of interest rates and housing finance globally. Of particular interest for The Regulators is the authors’ comment:“Interest Type: Mortgage rates can be fixed through the life of a loan, or vary over time with changes linked to key interest rates in the economy. In our sample, the standard mortgage rate is variable in 30 countries, fixed in 12 countries; while in the remaining 14 countries both contracts are observed. Variable rates are more common in emerging economies.”Our country is not the only one that needs to have this debate to better protect customers. It is clearly a systemic risk that needs discussing and addressing. It is a bi-partisan global issue.
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