Securitization and Bank Performance

Barbara Casu, Andrew Clare, Anna Sarkisyan and Stephen Thomas

Journal of Money, Credit and Banking, 2013, vol. 45, issue 8, 1617-1658

Abstract: Using predominantly precrisis U.S. commercial bank data, this paper employs a propensity score matching approach to analyze whether individual banks did improve their performance through securitization. On average, our results show that securitizing banks tend to be more profitable institutions, with higher credit risk exposure. Despite a more diversified funding structure, they face higher funding costs. We also find that securitizing banks tend to hold larger and less diversified loan portfolios, have less liquidity, and hold less capital. However, our analysis does not provide evidence to suggest that securitization had an impact upon bank performance.

Date: 2013
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https://doi.org/10.1111/jmcb.12064

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Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:45:y:2013:i:8:p:1617-1658

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