题目：Bank Competition, Securitization and Risky Investment

主讲人：Li, Zhe Assistant Professor, SHUFE

Abstract

In order to gauge the effects of securitization on lending risk and on the efficiency of financial system we build a dynamic general equilibrium model of bank competition in which securitization is banks' optimal choice. A key feature of the model is that banks face heterogenous projects and they can use lending rate as a tool to compete for good projects. The competition of banks results in a low supply of credit. We show that capital requirement may be able to moderate the competition among banks but only with limited effects. If we allow for securitization, credit supply increases dramatically; as a consequence, the projects that have higher risk could be financed and the average risk of lending becomes higher than without securitization.