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Professor H. Evren Damar, PhD

Professor H. Evren Damar, PhD
Current Position

since 3/17

Research Professor

Halle Institute for Economic Research (IWH) – Member of the Leibniz Association

since 8/16

Assistant Professor of Economics

Hobart and William Smith Colleges

Research Interests
  • financial markets and the real economy

H. Evren Damar joined the institute as a Research Professor in March 2017. His research focuses on effects of the behaviour of financial institutions and the impact of financial regulations on the real economy.

H. Evren Damar holds the position of Assistant Professor of Economics at Hobart and William Smith Colleges. He received his PhD from University of Washington.

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Publications

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Banks’ Funding Stress, Lending Supply, and Consumption Expenditure

H. Evren Damar Reint E. Gropp Adi Mordel

in: Journal of Money, Credit and Banking, No. 4, 2020

Abstract

We employ a unique identification strategy linking survey data on household consumption expenditure to bank‐level data to estimate the effects of bank funding stress on consumer credit and consumption expenditures. We show that households whose banks were more exposed to funding shocks report lower levels of nonmortgage liabilities. This, however, only translates into lower levels of consumption for low‐income households. Hence, adverse credit supply shocks are associated with significant heterogeneous effects.

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International Banking and Cross-Border Effects of Regulation: Lessons from Canada

H. Evren Damar Adi Mordel

in: International Journal of Central Banking, No. 1, 2017

Abstract

We study how changes in prudential requirements affect cross-border lending of Canadian banks by utilizing an index that aggregates adjustments in key regulatory instruments across jurisdictions. We show that when a destination country tightens local prudential measures, Canadian banks increase the growth rate of lending to that jurisdiction, and the effect is particularly significant when capital requirements are tightened and weaker if banks lend mainly via affiliates. Our evidence also suggests that Canadian banks adjust foreign lending in response to domestic regulatory changes. The results confirm the presence of heterogeneous spillover effects of foreign prudential requirements.

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Consumer Bankruptcy, Bank Mergers and Information

Jason Allen H. Evren Damar David Martinez-Miera

in: Review of Finance, No. 4, 2016

Abstract

This article analyzes the relationship between consumer bankruptcy patterns and the destruction of soft information caused by mergers. Using a major Canadian bank merger as a source of exogenous variation in local banking conditions, we show that local markets affected by the merger exhibit an increase in consumer bankruptcy rates post-merger. The evidence is consistent with the most plausible mechanism being the disruption of consumer–bank relationships. Markets affected by the merger show a decrease in the merging institutions’ branch presence and market share, including those stemming from higher switching rates. We rule out alternative mechanisms such as changes in quantity of credit, loan rates, or observable borrower characteristics.

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Working Papers

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Banking Deregulation and Consumption of Home Durables

H. Evren Damar Ian Lange Caitlin McKennie Mirko Moro

in: IWH Discussion Papers, No. 4, 2022

Abstract

We exploit the spatial and temporal variation of the staggered introduction of interstate banking deregulation across the U.S. to study the relationship between credit constraints and consumption of durables. Using the American Housing Survey from 1981 to 1989, we link the timing of these reforms with evidence of a credit expansion and household responses on many margins. We find evidence that low-income households are more likely to purchase new appliances after the deregulation. These durable goods allowed households to consume less natural gas and spend less time in domestic activities after the reforms.

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Flight from Safety: How a Change to the Deposit Insurance Limit Affects Households‘ Portfolio Allocation

H. Evren Damar Reint E. Gropp Adi Mordel

in: IWH Discussion Papers, No. 19, 2019

Abstract

We study how an increase to the deposit insurance limit affects households‘ portfolio allocation by exogenously reducing uninsured deposit balances. Using unique data that identifies insured versus uninsured deposits, along with detailed information on Canadian households‘ portfolio holdings, we show that households respond by drawing down deposits and shifting towards mutual funds and stocks. These outflows amount to 2.8% of outstanding bank deposits. The empirical evidence, consistent with a standard portfolio choice model that is modified to accommodate uninsured deposits, indicates that more generous deposit insurance coverage results in nontrivial adjustments to household portfolios.

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