Collateral is a widely used, but not well understood, debt-contracting feature. Two broad strands of theoretical … literature explain collateral as arising from the existence of either ex ante private information or ex post incentive problems … ex post theories of collateral are empirically dominant although the ex ante theories are also valid for customers with …

Traditionally banks have used securitization for expanding credit and thus their profitability. It has been well …-rated tranche. This paper builds a simple model of securitization that accounts for the above retention strategies. Banks in the … documented that, at least before the 2008 crisis, many banks were keeping a high proportion of the securities that they created …

strategy if banks think long-term. If banks are myopic no information sharing may occur. …

banks' dependence on individual bank managers as private information in the lending process declines. In this paper we argue … bank managers and shareholders becomes less severe. Consequently, banks' capital structure needs to be less concerned with … marketability of bank assets allows banks to adopt a safer capital structure, the default risk of banks does not necessarily decline. …

competition on this choice. We find that competing banks use collateral less often than a monopolistic bank because competition … collateralization in a model where banks do not have this superior screening skill. In particular, we study the effect of bank … will intensify if both banks collateralize. Moreover, bank competition is welfare improving if collateralization is rather …

An important theoretical literature motivates collateral as a mechanism that mitigates adverse selection, credit … incidence of collateral. We exploit exogenous variation in lender information related to the adoption of an information … technology that reduces ex ante private information, and compare collateral outcomes before and after adoption. Our results are …

. Macroeconomic factors also play a large role explaining the impact of securitization activity on bank lending standards: banks more …We investigate the effect of securitization activity on banks’ lending standards using evidence from pricing behavior … on the syndicated loan market. We find that banks more active at originating asset-backed securities are also more …

securitization activity, weak supervision for bank capital and too low for too long monetary policy rates. Conversely, low long …Using a unique dataset of the Euro area and the U.S. bank lending standards, we find that low (monetary policy) short …

. Interestingly, commercial banks seem to use loan securitization to access capital-market based businesses and the associated fee …We analyze collateralized loan obligation (CLO) transactions by European banks (1997 - 2004), trying to identify firm …-specific and macroeconomic factors influencing an institution's securitization decision. CLO issuance seems to be an appropriate …