A Historical and Regional Overview of Securitization

Solomon Deku and Alper Kara
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Alper Kara: Loughborough University

Chapter 4 in Securitization: Past, Present and Future, 2017, pp 57-91 from Palgrave Macmillan

Abstract: Abstract This chapter looks at the history of securitization markets and regional developments. Earlier examples of securitization include the farm railroad mortgage bonds in the 1860s, the mortgage-backed debentures of the 1880s and publicly sponsored securitization of mortgages in 1920s. However, modern Securitization owes its origin to the Government Sponsored Entities (GSEs) established by the US government to encourage mortgage lending and home ownership in the late 1960s. Private enterprises started to securitise assets in the 1970s. Innovative new products, such as the REMICs, and weaknesses of Basel I capital requirement regulations for securitised assets were the main drives of securitization markets in the 1980s and 1990s. The market showed an immense growth in the 2000s prior to the 2007–2009 financial crisis and came to a halt after the crisis. Subsequently, we look at the changes in the regulation of securitization after the crisis.

Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-3-319-60128-1_4

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DOI: 10.1007/978-3-319-60128-1_4

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