Traditionally banks have used securitization for expanding credit and thus their profitability. It has been well …-rated tranche. This paper builds a simple model of securitization that accounts for the above retention strategies. Banks in the …

Securitization is a financial innovation that experiences a boom-bust cycle, as many other innovations before. This … paper analyzes possible reasons for the breakdown of primary and secondary securitization markets, and argues that …

diversification increases systemic risk. We consider the case of securitization, whereby loan portfolios are sliced into tranches with … different seniority levels. We show that tranching offers nonlinear diversification strategies, which can reduce the failure …

traditional lenders to capital markets. This can primarily be achieved through securitization and CDOs. Both have different …

view of incentives that change as a consequence of securitization and contagion processes. It provides a critical analysis … of banking and the role of securitization in it. The former focuses on its impact on the traditional model of commercial … banking, whereas the latter sees the role of securitization in the emergence of a parallel banking system (shadow banking …

Lack of transparency in securitization transactions significantly contributed to the severe financial crisis of 2007 … participants at each stage of the securitization process to obtain easily full information about the underlying original risks and … considerably enhance transparency in securitization transactions at the expense of some transaction costs, while reducing the need …