The study looked at how the loan-to-value ratio affects the likelihood of people defaulting on their mortgage payments. They used data from mortgage loans in Spain from 2005-8 and found that higher initial LTV ratios are linked to higher default risk. The risk of default increases sharply for ratios over 80%. These results support the idea of setting different capital requirements for banks based on LTV ratios, as proposed in Basel III. The researchers also suggest considering the "seasoning" variable to improve models for measuring capital requirements.