Cover; Credit, Securitization and Monetary Policy: Watch Out for Unintended Consequencse; Abstract; I. INTRODUCTION; II. A BRIEF OVERVIEW OF MORTGAGE SECURITIZATION IN THE U.S.; III. IDENTIFICATION STRATEGY OF INTEREST RATE SHOCKS; IV. DESCRIPTION OF THE DATA; V. EMPIRICAL RESULTS; VI. CONCLUSIONS; VII. APPENDIX; VIII. REFERENCES
Summary
We show evidence that interest rate hikes slowdown loan growth but lead intermediation to migrate from banks balance sheets to non-banks via increased securitization activity. As such, higher interest rates have the potential for unintended consequences; raising systemic risk rather than lowering it by pushing more intermediation activity to more weakly regulated sectors. In the past, this increased securitization activity was driven primarily byb private-label securitization. On the other hand, the government sponsored entities like Freddie Mac and Fannie Mae appear to react to higher policy rates by cutting back on their securitization activity but expanding loans to the Federal Home Loan Bank system.--Abstract
Notes
"March 2016."
"Western Hemisphere Department."
Bibliography
Includes bibliographical references (pages 20-21)
Notes
Online resource; title from pdf title page (IMF.org Web site, viewed March 28, 2016)
