Securitizations are complex and opaque transactions. We hypothesize that bank insiders trade on private information about banks': (1) securitization-related recourse risks, (2) not-yet-reported current-quarter securitization income, and (3) securitization-based business model sustainability. We...

During the 2007–2009 financial crisis, many parties criticized aspects of accounting requirements for banks as undermining financial stability. These criticisms generally reflect the view that these requirements primarily affect stability through their effects on banks' regulatory capital...