Traditionally banks have used securitization for expanding credit and thus their profitability. It has been well …-rated tranche. This paper builds a simple model of securitization that accounts for the above retention strategies. Banks in the …

research has hypothesized that these cutoff rules result from a securitization rule of thumb. Under this theory, an observed … jump in defaults at the cutoff would imply that securitization led to lax screening. We argue instead that originators … that securitization caused lax screening. We examine loan-level data and find that the evidence is inconsistent with the …

This study investigates whether banks and insurance corporations perform regulatory arbitrage by buying bonds with …

Arbitrage trading strategies are a class of trading strategies that involve buying and selling financial instruments to … take advantage of price discrepancies. The goal of arbitrage trading is to make a profit from the differences in prices … between securities or markets, without taking on significant directional risk. Arbitrage trading strategies typically rely on …

. Recent research has used variation induced by these rules to investigate the connection between securitization and lender … moral hazard problem posed by securitization. …

. Recent research has used variation induced by these rules to investigate the connection between securitization and lender … moral hazard problem posed by securitization. …

Traditionally banks have used securitization for expanding credit and thus their profitability. It has been well …-rated tranche. This paper builds a simple model of securitization that accounts for the above retention strategies. Banks in the … predicted retention strategies match well those found in empirical studies. -- securitization ; tranching ; credit expansion …

research has hypothesized that these cutoff rules result from a securitization rule of thumb. Under this theory, an observed … jump in defaults at the cutoff would imply that securitization led to lax screening. We argue instead that originators … that securitization caused lax screening. We examine loan-level data and find that the evidence is inconsistent with the …

Does securitization distort the foreclosure decisions of non-performing mortgages? In a model of mortgage …-backed securitization with an endogenous foreclosure policy, we find that the securitizing bank adopts a tougher foreclosure policy than the … problem in securitization by making the optimal security, a risky debt, less information-sensitive. We further show that …