Politica monetaria, finanza strutturata e mercati finanziari

Giorgio Pizzutto

Departmental Working Papers from Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano

Abstract: Current interpretations of financial crisis are rooted on the conviction that banks are always prone to moral hazard and monetary policy has to intervene to avoid bubbles and the subsequent failure . This paper suggests that financial market’s instability derives from the interaction between monetary policy, non bank financial intermediation and securitization process. Following low interest rates policy, profitability falls and securitization offers an opportunity to increase net interest margin. Unfortunately securitization process raise asset prices of investment grade bonds, squeezes returns and risk premium. So non bank financial intermediaries began to look for high yield loans and short term liabilities to boost returns. When monetary policy tightens, yield curve inverted and returns disappear; asset prices deflation begins, risk premium increases and financial crisis follows.

Keywords: Financial crisis; monetary policy; structured finance; financial instability. (search for similar items in EconPapers)
JEL-codes: E43 E51 E58 G01 (search for similar items in EconPapers)
Date: 2010-11-20
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Persistent link: https://EconPapers.repec.org/RePEc:mil:wpdepa:2010-36

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