Author : Diana Hancock
Publisher : DIANE Publishing
ISBN 13 : 1437939872
Total Pages : 42 pages
Book Rating : 4.4/5 (379 download)
Book Synopsis Analysis of Government Guarantees and the Functioning of Asset-Backed Securities Markets by : Diana Hancock
Download or read book Analysis of Government Guarantees and the Functioning of Asset-Backed Securities Markets written by Diana Hancock and published by DIANE Publishing. This book was released on 2011-04 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: Focuses on a specific market failure that is associated with asset-backed securitization and proposes a tailored gov¿t. remedy. The additional liquidity provided by securitization may (or may not) lower primary loan rates. If guarantee-sensitive investors doubt the credit quality of asset-backed bonds, large risk premiums can develop. If a financial crisis ensues, securitization can disappear from the market entirely, leaving banks that originate the highest quality loans as the only source of credit. This abrupt increase in lending standards can tighten credit, exacerbate asset price declines, and impinge on econ. growth. An institutional structure for stemming ¿runs¿ could be deployed to insure pre-specified asset-backed instruments. Illus. This is a print on demand pub.