-backed securities (MBS) to evaluate this claim for subprime securitization during the Great Recession. I find that output in the U … that securitization improves financial stability if the securitized assets are held by capital market participants, rather … than financial intermediaries. I construct a quantitative macroeconomic model with a novel specification for mortgage …

effects) and that under certain circumstances the securitization of subprime loans (in form of residential mortgage backed …One of the roots of the recent global financial crisis has been seen in the design of subprime mortgage contract … years preceding the crisis, has been highly financed by securitization. The paper investigates how borrowers with subprime …