The Seven Deadly Frictions of Subprime Mortgage Credit Securitization

Adam B. Ashcraft and Til Schuermann
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Adam B. Ashcraft: Federal Reserve Bank of New York, USA

Chapter 20 in The First Credit Market Turmoil of the 21st Century:Implications for Public Policy, 2009, pp 325-343 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractThe following sections are included:Frictions Between the Mortgagor and Originator: Predatory LendingFrictions Between the Originator and the Arranger: Predatory Lending and BorrowingFrictions Between the Arranger and Third Parties: Adverse SelectionAdverse selection and the warehouse lenderAdverse selection and the asset managerAdverse selection and credit rating agenciesFrictions Between the Servicer and the Mortgagor: Moral HazardFrictions Between the Servicer and Third Parties: Moral HazardFrictions Between the Asset Manager and Investor: Principal-AgentFrictions Between the Investor and the Credit Rating Agencies: Model ErrorFive Frictions that Caused the Subprime CrisisReferences

Keywords: Financial Crises; Systemic Risk; Credit Market Turmoil; International Financial Markets (search for similar items in EconPapers)
Date: 2009
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