Securitization, housing market and banking sector behavior in a stock-flow consistent model
AbstractThis paper focuses on the different balance sheet management behavior of private banks and worker households, when assets are traded in the market. The authors take into consideration the securitization process, through which mortgage loans to households are converted into tradable securities which are held by investment banks in order to make profits. The demand for deposits by speculative households and realized capital gains on selling of mortgage-backed securities in the secondary market produce an inflation balloon in security markets, even though the authors apply the Basel III agreements to private banking behavior. --
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Bibliographic InfoPaper provided by Kiel Institute for the World Economy in its series Economics Discussion Papers with number 2013-13.
Date of creation: 2013
Date of revision:
securitization; stock-flow consistent modelling; active banking;
Find related papers by JEL classification:
- E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian
- G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-02 (All new papers)
- NEP-BAN-2013-03-02 (Banking)
- NEP-MAC-2013-03-02 (Macroeconomics)
- NEP-URE-2013-03-02 (Urban & Real Estate Economics)
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