Back to the Future : 900 Years of Securitization

Before the 2007 financial crisis, securitized products accounted for half the credit market. Once regarded as one of the biggest financial innovations of the last century, securitization is now viewed as a contributory factor to the crisis. Until recently research has focused on the post-1970s mortgage securitization market. In this paper, I trace the earlier origins of securitization, from the 12th century Genoese compera through to early 20th century efforts. The historical examples highlight unifying themes on risk allocation and complexity. As the future securitization market remains uncertain, it is important to consider lessons to be learned from these historical episodes