EconPapers    
Economics at your fingertips  
 

Securitization and Credit Quality

Alper Kara (), David Marques-Ibanez () and Steven Ongena ()

No 1148, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Banks are usually better informed on the loans they originate than outside investors. As a result, securitized loans might be of lower credit quality than — otherwise similar — non-securitized loans. We assess the effect of securitization activity on credit quality employing a uniquely detailed dataset from the euro-denominated syndicated loan market. We find that, at issuance, banks do not select and securitize loans of lower credit quality. Following securitization, however, the credit quality of borrowers whose loans are securitized deteriorates by more than those in the control group. We find tentative evidence suggesting that poorer performance by securitized loans might be linked to banks’ reduced monitoring incentives.

Keywords: Securitization; syndicated loans; credit risk (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ban and nep-ure
Date: 2015-11-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed

Downloads: (external link)
http://www.federalreserve.gov/econresdata/ifdp/2015/files/ifdp1148.pdf Full text (application/pdf)
http://dx.doi.org/10.17016/IFDP.2015.1148 DOI (application/pdf)

Related works:
Working Paper: Securitization and credit quality (2017) Downloads
Working Paper: Securitization and Credit Quality (2016) Downloads
Working Paper: Securitization and Credit Quality (2015) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgif:1148

Ordering information: This working paper can be ordered from
http://www.federalreserve.gov/pubs/ifdp/order.htm

DOI: 10.17016/IFDP.2015.1148

Access Statistics for this paper

More papers in International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by Ryan Wolfslayer ().

 
Page updated 2019-04-22
Handle: RePEc:fip:fedgif:1148