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The Rise and Fall of Demand for Securitizations

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Authors and Corporations: Chernenko, Sergey (Author), Sunderam, Adi (Other), Hanson, Samuel G. (Other), National Bureau of Economic Research (Other)
Other Authors: Sunderam, Adi [Other] • Hanson, Samuel G. [Other]
Type of Resource: E-Book
Language: English
published:
Cambridge, Mass National Bureau of Economic Research December 2014

Series: NBER working paper series
Source: Verbunddaten SWB
Lizenzfreie Online-Ressourcen
Description
Summary: Collateralized debt obligations (CDOs) and private-label mortgage-backed securities (MBS) backed by nonprime loans played a central role in the recent financial crisis. Little is known, however, about the underlying forces that drove investor demand for these securitizations. Using micro-data on insurers' and mutual funds' bond holdings, we find considerable heterogeneity in investor demand for securitizations in the pre-crisis period. We argue that both investor beliefs and incentives help to explain this variation in demand. By contrast, our data paints a more uniform picture of investor behavior in the crisis. Consistent with theories of optimal liquidation, investors largely traded in more liquid securities such as government-guaranteed MBS to meet their liquidity needs during the crisis
Physical Description: 1 Online-Ressource
Type of Resource: Mode of access: World Wide Web.
System requirements: Adobe [Acrobat] Reader required for PDF files.
DOI: 10.3386/w20777
Access: Open Access