Deposit competition and securitization / Danny McGowan, Huyen Nguyen, Klaus Schaeck ; Halle Institute for Economic Research (IWH) - Member of the Leibniz Association
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Discovery
182415965X
URN
urn:nbn:de:gbv:3:2-926404
DOI
ISBN
ISSN
Autorin / Autor
Beiträger
Körperschaft
Erschienen
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, December 2022
Umfang
1 Online-Ressource (III, 50 Seiten, 0,96 MB) : Diagramme
Ausgabevermerk
Sprache
eng
Anmerkungen
Literaturverzeichnis: Seite 23-26
Inhaltliche Zusammenfassung
We provide novel evidence that deposit competition incentivizes banks to securitize loans. Exploiting the state-specific removal of deposit market caps across the U.S. as an exogenous source of competition, we document a 7.1 percentage point increase in the probability that banks securitize their assets. This result is driven by an 11 basis point increase in costs of deposits and a corresponding decrease in banks’ deposit growth. Our results are strongest among small and single state incumbent banks that rely more on deposit funding. These findings highlight an unintended regulatory cause that motivates banks to adopt the originate-to-distribute model.
Schriftenreihe
IWH-Diskussionspapiere ; 2022, no. 29 (December 2022) ppn:837399270