We build a market equilibrium model of loan securitization as an alternative explanation of the cause of the recent … Financial Crisis where there was initially deteriorating loan quality but coupled with aggressive securitization, and later … information (in)accuracy. We show that securitization enhances banks' optimism in the loan market, and being optimistic is …

than US ones. Regarding the consequences of systemic risk, we show that dependence between the banking sector and a wide …

The banking system is highly interconnected and these connections can be conveniently represented as an interbank … contagion in the banking system and of how banks form connections when faced with the possibility of contagion and systemic risk …

. Differences in banking regulations across countries are generally uncorrelated with the performance of banks during the crisis …

banking system tend to contribute more to European wide systemic risk, even after controlling for their size. Therefore, any …