Mortgage Securitization and Shadow Bank Lending
We show how securitization affects the size of the nonbank lending sector through a novel price-based channel. We identify the channel using a regulatory spillover shock to the cross-section of mortgage-backed security prices: the U.S. liquidity coverage ratio. The shock increases secondary market p...
| Autores: | , |
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| Tipo de recurso: | artículo |
| Fecha de publicación: | 2021 |
| País: | España |
| Institución: | IE |
| Repositorio: | Repositorio IE |
| OAI Identifier: | oai:repositorio.ie.edu:20.500.14417/3308 |
| Acceso en línea: | https://doi.org/10.1093/rfs/hhaa088 https://hdl.handle.net/20.500.14417/3308 |
| Access Level: | acceso abierto |
| Palabra clave: | Lending Standards LCR Liquidity Mortgages Nonbanks FHA MBS 53 Ciencias Económicas::5304 Actividad económica::5304.05 Seguros ODS 1 - Fin de la pobreza ODS 8 - Trabajo decente y crecimiento económico ODS 10 - Reducción de las desigualdades ODS 9 - Industria, innovación e infraestructura |
| Sumario: | We show how securitization affects the size of the nonbank lending sector through a novel price-based channel. We identify the channel using a regulatory spillover shock to the cross-section of mortgage-backed security prices: the U.S. liquidity coverage ratio. The shock increases secondary market prices for FHA-insured loans by granting them favorable regulatory status once securitized. Higher prices lower nonbanks’ funding costs, prompting them to loosen lending standards and originate more FHA-insured loans. This channel accounts for 22% of nonbanks’ growth in overall mortgage market share over 2013–2015. While the shock creates risks for financial stability, homeownership also increases. |
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