research has hypothesized that these cutoff rules result from a securitization rule of thumb. Under this theory, an observed … jump in defaults at the cutoff would imply that securitization led to lax screening. We argue instead that originators … that securitization caused lax screening. We examine loan-level data and find that the evidence is inconsistent with the …

We provide a novel explanation for the low volume of securitization in catastrophe risk transfer using a signaling … model. Relative to securitization, reinsurance features lower adverse selection costs because reinsurers possess superior … reinsurance relative to securitization. In equilibrium, low risks are transferred via reinsurance, while intermediate and high …