We build a market equilibrium model of loan securitization as an alternative explanation of the cause of the recent … Financial Crisis where there was initially deteriorating loan quality but coupled with aggressive securitization, and later … information (in)accuracy. We show that securitization enhances banks' optimism in the loan market, and being optimistic is …

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 …

. 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. …

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 …

We address the moral hazard problem of securitization using a principal-agent model where the investor is the principal … and the lender is the agent. Our model considers structured asset-backed securitization with a credit enhancement …

This paper aims at discussing the role of securitization in the 2008 crisis and how it links to the Austrian Business … Cycle Theory (ABCT). The argument that securitization is behind the scriptural credit creation during the boom preceding the … 2008 crisis is incomplete. It shall be demonstrated by means of consolidated balance sheet analysis that securitization per …