Why Do Depository Institutions Use Securitisation

Journal of Banking Regulation, Vol. 10, No. 2, 2009

31 Pages Posted: 8 Sep 2006 Last revised: 24 Feb 2011

See all articles by Amelia Pais

Amelia Pais

Massey University - Department of Commerce

Date Written: June 1, 2005

Abstract

The objective of this paper is to explore the economic incentives behind the securitisation decision. This paper examines two competing hypotheses, the "comparative advantage hypothesis" and the "financing hypothesis". A UK data set is used, thereby avoiding some of the problems arising from US data, such as usually leaving out of the empirical tests the securitisation of mortgages and personal loans. The results support the financing hypothesis that is; the use of securitisation by British depository institutions is due to financing needs rather than to a loss of their comparative advantage in performing the intermediary role.

Keywords: securitisation, depository institutions

JEL Classification: G2, G21

Suggested Citation

Pais, Amelia, Why Do Depository Institutions Use Securitisation (June 1, 2005). Journal of Banking Regulation, Vol. 10, No. 2, 2009. Available at SSRN: https://ssrn.com/abstract=928744

Amelia Pais (Contact Author)

Massey University - Department of Commerce ( email )

Private Bag 102-904
Auckland
New Zealand

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