Vahid Saadi, Ph.D.
Assistant Professor of Finance
IE Business School

Maria de Molina 12,
4º Izda
28006, Madrid
P: +34917821706

Research interests: Empirical Banking, Financial Intermediation, Real Estate, Microeconometrics

Working Papers
  • Mortgage Supply and the US Housing Boom: The Role of the Community Reinvestment Act, (Job Market Paper), SAFE Working Paper No. 155 -- Revise and Resubmit at The Review of Financial Studies

    • Presented at: AFA 2017
    • This paper studies the role of the Community Reinvestment Act (CRA) in the US housing boom-bust cycle. I find that the enhancement in enforcing the CRA in 1998 increased the growth rate of mortgage lending by CRA-regulated banks to CRA-eligible census tracts. I use this shift in mortgage supply in an instrumental variable framework and find that every 1 percentage point higher annual growth rate of mortgage supply leads to 0.3 percentage points higher annual growth rate of housing prices. I show that CRA-induced mortgages went to borrowers with slightly lower FICO scores but encountered considerably more frequent delinquencies.            

  • Public Bank Guarantees and Allocative Efficiencyncy, with Reint Gropp and Andre Guettler, IWH Discussion Paper No 7/2015 

    • Presented at: EFA 2015*; EBC (Tilburg) 2015; ASSA Day-ahead 2016*; MFA 2016; FIRS 2016*; BoE, BHC, CEPR and CFM Workshop on Finance, Investment and Productivity 2016; Chicago Financial Institutions Conference 2017*; 25th Finance Forum (UPF) (* presented by co-authors)

    • Scheduled at: MIT Golub Center for Finance and Policy 4th Annual Conference

    • We take advantage of a natural experiment and matched bank/firm data to identify the effects of public guarantees on allocative efficiency. We find that with guarantees in place poorly performing firms invest more and maintain higher rates of sales growth. Moreover, firms produce less efficiently. Also, firms survive longer in banks' portfolios and firms that enter guaranteed banks' portfolios are less efficient. At the sectoral level we observe lower firm exit rates and bankruptcies. Overall, the results are consistent with the idea that guaranteed banks keep inefficient firms in business for too long and prevent their exit from the market.

Work in Progress
  • The Cleansing Effect of Banking Crises, with Reint Gropp and Joerg Rocholl

  • Electoral Lending Cycles: The Case of German Savings Banks, with Reint Gropp

  • The Pope, Martin Luther and Banking Behavior: Does Local Denomination Affect Bank Risk Taking?, with Konstantin Kiesel