Author : Afrasiab Mirza
Publisher :
ISBN 13 :
Total Pages : 43 pages
Book Rating : 4.:/5 (95 download)
Book Synopsis Securitization and Aggregate Investment Efficiency by : Afrasiab Mirza
Download or read book Securitization and Aggregate Investment Efficiency written by Afrasiab Mirza and published by . This book was released on 2016 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper studies the efficiency of competitive equilibria in economies where the expansion of investment is facilitated by securitization. We show that the use of se-curitization is generally associated with constrained inefficient aggregate investment, thereby justifying regulatory intervention in markets for securitized assets. We examine the effectiveness of three policy instruments to address this ine ciency: ex-ante capital / leverage requirements, skin-in-the game (retention) requirements and initiatives to improve transparency in the securitization process. We find that leverage/capital restrictions and improved transparency can increase welfare in our environment, but that forcing originators to hold additional skin-in-the game can never increase welfare.