ERES:conference

This paper analyzes the risk-taking behavior of financial intuitions that have guarantees and/or institutions that find it beneficial to develop a reputation for not taking risk. It focuses on two questions: Is it rational for them to take on less risk than they can get away with, and if it is...

This paper models the development of the secondary market as a way of trading off its lower cost of securitization with adverse selection due to asymmetric information and high monitoring costs. We use a simple adverse selection model in the tradition of Akerlof (1970) with successive...

Changes in the mortgage industry have been swiftly effected over the past few years. Many of the changes have come about as a response to the high level of observed delinquencies and defaults on residential mortgages as house prices plummeted and others have evolved from continuing concerns...