Study of the Impact of Securitization on Consumers, Investors, Financial Institutions, and the Capital Markets
17 June 2009
By Dr. Faten Sabry and Dr. Chudozie Okongwu
In the fall of 2007, the American Securitization Forum (ASF) commissioned a NERA team -- led by Senior Vice Presidents Dr. Chudozie Okongwu and Dr. Faten Sabry -- to conduct a study to evaluate the impact of securitization on consumers, investors, and the broader financial markets. A primary motivation for commissioning this study was ASF's assessment that there was little academic or other research that attempted to evaluate and quantify the broader economic impact of securitization in an analytically rigorous way. The study, released on 17 June 2009, assesses the long term impact of securitization, with a focus on the residential mortgage-backed securities market. Dr. Sabry and Dr. Okongwu analyze the impact of securitization on the cost and availability of credit, as well as how securitization affects market liquidity and the distribution of risk based on an extensive review of loan-level and other data.
The study found that securitization has produced significant economic benefits in certain markets. Specifically, the study highlights that:
