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 …

) arbitrage and to improve key financial ratios. Although the economic advantages, securitization also has problems, especially …Securitization is the process whereby financial assets are pooled together, with their cash flows, and sold to a … securities, in the form of debt instruments, into the market. Securitization is thus a technique used to transform illiquid …

The agency conflicts inherent in securitization are viewed by many as having been a key contributor to the recent … research for the U.S. home mortgage market suggests that securitization itself may not have been a problem, but rather the …