Competition And Bank Risk: The Role Of Securitization And Bank Capital

Yener Altunbas, Michiel Van Leuvensteijn and David Marques-Ibanez

No 13005, Working Papers from Bangor Business School, Prifysgol Bangor University (Cymru / Wales)

Abstract: We find that the increased use of securitization activity in the banking sector augmented the effect of competition on realized bank risk during the 2007-2009 crisis. Our results suggest that securitization by itself does not lead to augmented risk while higher levels of capital do not buffer the impact of competition on realized risk. It follows that cooperation between supervisory and competition authorities would be beneficial when acting on the financial stability implications of financial innovation and the effects of bank capital regulation.

Keywords: securitization; competition; bank risk (search for similar items in EconPapers)
JEL-codes: D22 G21 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2013-10
New Economics Papers: this item is included in nep-ban, nep-com, nep-fmk and nep-rmg
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http://www.bangor.ac.uk/business/research/documents/BBSWP13005.pdf (application/pdf)

Related works:
Working Paper: Competition and Bank Risk the Role of Securitization and Bank Capital (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:bng:wpaper:13005

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