Does high leverage incentivize banks to systematically originate and hold riskier loans? I construct a novel data set consisting of 3 million small business and home mortgage loans, matched to the specific banks that originated them and verified to be held on bank portfolios, rather than sold. I...

Did private mortgage securitization contribute causally to the recent subprime lending boom, or was it simply a slightly more convenient way to finance lending that would have occurred anyway? We exploit a natural experiment in which the S&P rating agency increased costs of securitizing specific...