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Shocks to Bank Lending, Risk-Taking, Securitization, and their Role for U.S. Business Cycle Fluctuations
Peersman, Gert; Wagner, Wolf - C.E.P.R. Discussion Papers - 2015
Shocks to bank lending, risk-taking and securitization activities that are orthogonal to real economy and monetary … type of shock. Expansionary securitization shocks lead to a permanent rise in real GDP and a fall in inflation. Bank … using a model of bank risk-taking and securitization. …
Persistent link: https://www.econbiz.de/10011262887
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Securitization and Compensation in Financial Institutions
Inderst, Roman; Pfeil, Sebastian - C.E.P.R. Discussion Papers - 2010
their securitization decision. We also assess the case for requiring financial institutions to defer bonus pay so as to make … interaction of financial institutions' internal agency problems with the external agency problem that arises from securitization. …
Persistent link: https://www.econbiz.de/10008692310
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Lessons from the 2007 Financial Crisis
Buiter, Willem H. - C.E.P.R. Discussion Papers - 2007
The paper studies the causes of the current financial crisis and considers proposals for mitigation and prevention of future crises. The crisis is was the product of a ‘perfect storm’ bringing together a number of microeconomic and macroeconomic pathologies. Among the microeconomic systemic...
Persistent link: https://www.econbiz.de/10005791213
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Securitization and Commodity Contingency in International Lending
Anderson, Ronald W.; Gilbert, Christopher L - C.E.P.R. Discussion Papers - 1989
Securitization of LDC debt would significantly aid the international debt problem by increasing liquidity and expanding … the range of investors. Securitization is problematic, however, in large part due to sovereign risks involved. At present …
Persistent link: https://www.econbiz.de/10005791968
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Credit Ratings Failures and Policy Options
Pagano, Marco; Volpin, Paolo - C.E.P.R. Discussion Papers - 2009
This paper examines the role of credit rating agencies in the subprime crisis that triggered the 2007-08 financial turmoil. The focus of the paper is on two aspects of ratings that contributed to the boom and bust of the market for asset-backed securities: rating inflation and coarse information...
Persistent link: https://www.econbiz.de/10008558591
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Securitization, Transparency and Liquidity
Pagano, Marco; Volpin, Paolo - C.E.P.R. Discussion Papers - 2008
We present a model in which issuers of asset backed securities choose to release coarse information to enhance the liquidity of their primary market, at the cost of reducing secondary market liquidity or even causing it to freeze. The degree of transparency is inefficiently low if the social...
Persistent link: https://www.econbiz.de/10005504512
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Privately versus Publicly Optimal Skin in the Game: Optimal Mechanism and Security Design
Chemla, Gilles; Hennessy, Christopher - C.E.P.R. Discussion Papers - 2011
We examine screening incentives, welfare and the case for mandatory skin-in-the-game. Ex ante banks can screen, using interim private information to choose retentions and structuring. Ex post speculators trade with rational hedging investors. Absent regulation, there is a separating equilibrium...
Persistent link: https://www.econbiz.de/10009024483
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Loan Sales and Screening Incentives
Bester, Helmut; Gehrig, Thomas; Stenbacka, Rune - C.E.P.R. Discussion Papers - 2012
We analyze the effect of loan sales on the intensity of costly screening. Loan sales strengthen screening incentives when screening primarily improves the bank’s ability to identify profitable loans and when banks retain most of those profitable loans. However, loan sales dampen screening...
Persistent link: https://www.econbiz.de/10011083726
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Lending relationships and credit rationing: the impact of securitization
Carbó Valverde, Santiago; Degryse, Hans; … - C.E.P.R. Discussion Papers - 2012
Banks have been heavily involved in securitization. We study whether the involvedness of a firm’s main bank into … different types of securitization activity -- asset backed securities (ABS) and covered bonds -- influences credit supply before … and during the 2007-8 financial crisis. Both types of securitization allow the bank to generate liquidity. To the extent …
Persistent link: https://www.econbiz.de/10011084511
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Courts and Banks: Effects of Judicial Enforcement on Credit Markets
Bianco, Magda; Jappelli, Tullio; Pagano, Marco - C.E.P.R. Discussion Papers - 2002
The cost of enforcing contracts is a key determinant of market performance. We document this point with reference to the credit market in a model of opportunistic debtors and inefficient courts. According to the model, improvements in judicial efficiency should reduce credit rationing and...
Persistent link: https://www.econbiz.de/10005123567