In this study, we examine how banks' stock price crash risk is affected by recourse uncertainty embedded in securitizations. By recourse uncertainty, we mean the difficulty for equity market participants to assess the true extent of risk transfer between securitizing banks and investors in...

Critics have alleged that securitization accounting prior to 2010 was among the causes of the recent financial crisis. In response to this criticism, the Financial Accounting Standards Board (FASB) implemented two new accounting standards, SFAS 166 and SFAS 167, to improve the financial...

SFAS 166 and 167 require banks to consolidate certain off‒balance sheet securitization entities. I investigate how this consolidation spills over to banks' supply of small business loans, which are rarely securitized in the United States. This spillover operates through two channels. (1) In...