We study the optimal loan securitization policy of a commercial bank which is mainly engaged in lending activities. For this we propose a stylized dynamic model which contains the main features affecting the securitization decision. In line with reality we assume that there are non-negligible...

For ten years interest rates in the Eurozone have been declining. This has created a situation where loan or bond prepayments and subsequent refinancing transactions are potentially beneficial for debtors. The advantageousness depends on the costs induced. We analyze the favorability of debt...

Analyzing the period 1988--2006, we document that banks that are active in strong housing markets increase mortgage lending and decrease commercial lending. Firms that borrow from these banks have significantly lower investment. This is especially pronounced for firms that are more capital...

Between 2003 and 2006, the Federal Reserve raised rates by 4.25%. Yet it was precisely during this period that the housing boom accelerated, fueled by rapid growth in mortgage lending. There is deep disagreement about how, or even if, monetary policy impacted the boom. Using differences in...

The recent global financial crisis, sparked by developments in the American mortgage market, provides a timely opportunity for a thorough analysis of the standard model for financing home purchases. The United States residential mortgage market has two prominent aspects: first, a significant...

We investigate whether religion acts as a deterrent to the types of mortgage misrepresentation that played a significant role in the recent housing boom and bust. Using a large sample of mortgages originated from 2000 to 2007, we provide evidence that local religious adherence (religiosity) is...

I study how China's trade liberalization affects US manufacturing firms' debt structure and banks' loan allocation. Firms with higher Chinese import penetration decrease the demand for short-term debt after 2001, caused by a permanent drop in inventory. Exposed firms take fewer short-term loans...

This study provides direct evidence of the value to banks arising from relationship lending by estimating the market premium placed on banking organizations' small business loan portfolios. Using data from the small business loan survey contained in the June bank Call Reports, we find that small...

We review the period of the Latin American debt crisis in order to draw policy analogies from that experience for current U.S. credit securitization markets. During the earlier episode the Brady Plan used a zero-coupon U.S. Treasury security to provide a credit enhancement for the troubled...

This study aims to explain causal relationships between the two dramatic cycles observed in the U.S. during the recent financial crisis - the mortgage credit cycle and the home price cycle. In the viewpoint of mortgage lending, the main demand-side driver for the observed credit concentration...