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Securitization

In: Handbook of the Economics of Finance

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  • Gorton, Gary
  • Metrick, Andrew

Abstract

We survey the literature on securitization and lay out a research program for its open questions. Securitization is the process by which loans, previously held to maturity on the balance sheets of financial intermediaries, are sold in capital markets. Securitization has grown from a small amount in 1990 to a pre-crisis issuance amount that makes it one of the largest capital markets. In 2005 the amount of non-mortgage asset-backed securities issued in US capital markets exceeded the amount of US corporate debt issued, and these securitized bonds—even those unrelated to subprime mortgages—were at center of the recent financial crisis. Nevertheless, despite the transformative effect of securitization on financial intermediation, the literature is still relatively small and many fundamental questions remain open.

Suggested Citation

  • Gorton, Gary & Metrick, Andrew, 2013. "Securitization," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, volume 2, chapter 0, pages 1-70, Elsevier.
  • Handle: RePEc:eee:finchp:2-a-1-70
    DOI: 10.1016/B978-0-44-453594-8.00001-X
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    More about this item

    Keywords

    Securitization; Capital Markets; Asset-Backed Securities; Financial Crisis;
    All these keywords.

    JEL classification:

    • G1 - Financial Economics - - General Financial Markets
    • G2 - Financial Economics - - Financial Institutions and Services
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General

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