Policy Uncertainty and Bank Mortgage Credit

We document that banks reduce the supply of mortgage loans when policy uncertainty increases in their headquarter states as measured by timing U.S. gubernatorial elections. The reduction is larger for term-limited elections and close utilize high-frequency, geographically granular loan-level data to address an identification problem arising from changing local loan demand: (i) we estimate a difference-in-difference specification with state/time or county/time fixed effects; (ii) lending outside home well hold elections; (iii) observe important cross-sectional differences way different characteristics respond uncertainty.