Asset Securitization And Optimal Retention
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| Author | : Mr.John Kiff |
| Publisher | : International Monetary Fund |
| Total Pages | : 40 |
| Release | : 2010-03-01 |
| Genre | : Business & Economics |
| ISBN | : 1451982178 |
This paper builds on recent research by Fender and Mitchell (2009) who show that if financial institutions securitize loans, retaining an interest in the equity tranche does not always induce the securitizer to diligently screen borrowers ex ante. We first determine the conditions under which this scenario becomes binding and further illustrate the implications for capital requirements. We then propose an extension to the existing model and also solve for optimal retention size. This also allows us to capture feedback effects from capital requirements into the maximization problem. Preliminary results show that equity tranche retention continues to best incentivize loan screening.
| Author | : John Kiff |
| Publisher | : International Monetary Fund |
| Total Pages | : 41 |
| Release | : 2010-03-01 |
| Genre | : Business & Economics |
| ISBN | : 1451982011 |
This paper builds on recent research by Fender and Mitchell (2009) who show that if financial institutions securitize loans, retaining an interest in the equity tranche does not always induce the securitizer to diligently screen borrowers ex ante. We first determine the conditions under which this scenario becomes binding and further illustrate the implications for capital requirements. We then propose an extension to the existing model and also solve for optimal retention size. This also allows us to capture feedback effects from capital requirements into the maximization problem. Preliminary results show that equity tranche retention continues to best incentivize loan screening.
| Author | : Jennifer Romero-Torres |
| Publisher | : Asian Development Bank |
| Total Pages | : 130 |
| Release | : 2017-11-01 |
| Genre | : Business & Economics |
| ISBN | : 9292579843 |
India needs to spend close to Rs43 trillion (about $646 billion) on infrastructure through to 2022. Such a staggering requirement cannot be met though traditional sources such as public sector bank loans. India must immediately explore and quickly ramp up financing from alternative investment sources. This report provides an overview of infrastructure financing in India, sheds light on the challenges faced by the country's banking sector, suggests an optimal mechanism for securitizing the infrastructure assets of public sector banks, and outlines a range of scenarios and factors that must be in place for this mechanism to be successfully realized.
| Author | : Adam B. Ashcraft |
| Publisher | : DIANE Publishing |
| Total Pages | : 76 |
| Release | : 2010-03 |
| Genre | : |
| ISBN | : 1437925146 |
Provides an overview of the subprime mortgage securitization process and the seven key informational frictions that arise. Discusses the ways that market participants work to minimize these frictions and speculate on how this process broke down. Continues with a complete picture of the subprime borrower and the subprime loan, discussing both predatory borrowing and predatory lending. Presents the key structural features of a typical subprime securitization, documents how rating agencies assign credit ratings to mortgage-backed securities, and outlines how these agencies monitor the performance of mortgage pools over time. The authors draw upon the example of a mortgage pool securitized by New Century Financial during 2006. Illustrations.
| Author | : Kravitt |
| Publisher | : Wolters Kluwer |
| Total Pages | : 1902 |
| Release | : 2012-12-18 |
| Genre | : Law |
| ISBN | : 0735561923 |
| Author | : Vanessa Le Leslé |
| Publisher | : International Monetary Fund |
| Total Pages | : 50 |
| Release | : 2012-03-01 |
| Genre | : Business & Economics |
| ISBN | : 1475502656 |
In this paper, we provide an overview of the concerns surrounding the variations in the calculation of risk-weighted assets (RWAs) across banks and jurisdictions and how this might undermine the Basel III capital adequacy framework. We discuss the key drivers behind the differences in these calculations, drawing upon a sample of systemically important banks from Europe, North America, and Asia Pacific. We then discuss a range of policy options that could be explored to fix the actual and perceived problems with RWAs, and improve the use of risk-sensitive capital ratios.
| Author | : Stuart I. Greenbaum |
| Publisher | : Academic Press |
| Total Pages | : 492 |
| Release | : 2019-05-14 |
| Genre | : Business & Economics |
| ISBN | : 0124059341 |
Contemporary Financial Intermediation, 4th Edition by Greenbaum, Thakor, and Boot continues to offer a distinctive approach to the study of financial markets and institutions by presenting an integrated portrait that puts information and economic reasoning at the core. Instead of primarily naming and describing markets, regulations, and institutions as is common, Contemporary Financial Intermediation explores the subtlety, plasticity and fragility of financial institutions and credit markets. In this new edition every chapter has been updated and pedagogical supplements have been enhanced. For the financial sector, the best preprofessional training explains the reasons why markets, institutions, and regulators evolve they do, why we suffer recurring financial crises occur and how we typically react to them. Our textbook demands more in terms of quantitative skills and analysis, but its ability to teach about the forces shaping the financial world is unmatched. - Updates and expands a legacy title in a valuable field - Holds a prominent position in a growing portfolio of finance textbooks - Teaches tactics on how to recognize and forecast fluctuations in financial markets
| Author | : Stanford Law Review |
| Publisher | : Quid Pro Books |
| Total Pages | : 464 |
| Release | : 2012-04-25 |
| Genre | : Law |
| ISBN | : 1610279468 |
A leading law journal features a digital edition as part of its worldwide distribution, using quality ebook formatting and active links. The March 2012 issue of the Stanford Law Review contains studies of law, economics, and social policy by recognized scholars on diverse topics of interest to the academic and professional community. Contents for the March 2012 issue include: Prosecuting the Exonerated: Actual Innocence and the Double Jeopardy Clause; By Jordan M. Barry From Multiculturalism to Technique: Feminism, Culture, and the Conflict of Laws Style; By Karen Knop, Ralf Michaels & Annelise Riles Fragmentation Nodes: A Study in Financial Innovation, Complexity, and Systemic Risk; By Kathryn Judge Note: Insurmountable Obstacles: Structural Errors, Procedural Default, and Ineffective Assistance; By Amy Knight Burns Comment: The Gulf Coast Claims Facility and the Deepwater Horizon Litigation: Judicial Regulation of Private Compensation Schemes; By Colin McDonell In the ebook edition, all the footnotes, graphs, and tables of contents (including those for individual articles) are fully linked, properly scalable, and functional; the original note numbering is retained. Also, the URLs in notes are active; and the issue is properly formatted.
| Author | : Mathias Dewatripont |
| Publisher | : Princeton University Press |
| Total Pages | : 148 |
| Release | : 2015-09-22 |
| Genre | : Business & Economics |
| ISBN | : 0691168199 |
The financial crisis that began in 2007 in the US swept the world, producing substantial bank failures and forcing unprecedented state aid for the crippled global financial system. This book draws critical lessons from the causes of the crisis and proposes important regulatory reforms.
| Author | : Mr.Stijn Claessens |
| Publisher | : International Monetary Fund |
| Total Pages | : 39 |
| Release | : 2014-03-14 |
| Genre | : Business & Economics |
| ISBN | : 1484336658 |
We identify current challenges for creating stable, yet efficient financial systems using lessons from recent and past crises. Reforms need to start from three tenets: adopting a system-wide perspective explicitly aimed at addressing market failures; understanding and incorporating into regulations agents’ incentives so as to align them better with societies’ goals; and acknowledging that risks of crises will always remain, in part due to (unknown) unknowns – be they tipping points, fault lines, or spillovers. Corresponding to these three tenets, specific areas for further reforms are identified. Policy makers need to resist, however, fine-tuning regulations: a “do not harm” approach is often preferable. And as risks will remain, crisis management needs to be made an integral part of system design, not relegated to improvisation after the fact.
