Securitization and Bank Performance

Casu, Barbara; Clare, Andrew; Sarkisyan, Anna; Thomas, Stephen

doi:10.1111/jmcb.12064

Cited by 102 publications

(117 citation statements)

References 102 publications

(204 reference statements)

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“…Most of empirical studies find a similar relationship between profitability measures and securitization activity (e.g. Bannier and H€ ansel, 2008;Affinito and Tagliaferri, 2010;Cardone-Riportella et al, 2010;Casu et al, 2013).…”

Section: Determinants Of Mortgage-backed Securitizationmentioning

confidence: 83%

Mortgage‐backed Securitization and SME Lending During the Financial and Economic Crisis: Evidence from the Italian Cooperative Banking System

Castellani

2017

Economic Notes

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I investigate the determinants of the securitization activities of Italian cooperative banks during the financial and economic crisis (2007–2014) and the impact of securitization on the supply of loans to SMEs. The less deposit‐funded, less profitable and less capitalized cooperative banks are, the more likely they are to securitize and the more likely it is that they will securitize to a larger extent. Furthermore, I find that securitization has not directly affected the supply of new SME loans. However, there is strong evidence of a risk‐rebalancing effect of securitization on the balance sheet, especially in the period 2010–2014.

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Section: Determinants Of Mortgage-backed Securitizationmentioning

confidence: 83%

Mortgage‐backed Securitization and SME Lending During the Financial and Economic Crisis: Evidence from the Italian Cooperative Banking System

Castellani

2017

Economic Notes

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“…Equation 3 assumes that there are no unobservable differences between MFIs offering savings and the ones without savings after conditioning on X i so that any systematic differences in outcomes can be attributed to the savings‐offering effect (see Casu, Clare, Sarkisyan & Thomas, ).…”

Section: Methods and Datamentioning

confidence: 99%

Is the model “loans‐plus‐savings” better for microfinance in Eastern Europe and Central Asia? A propensity score matching comparison

Khachatryan

Baghdasaryan

Hartarska

2019

Review Development Economics

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Microfinance institutions are gradually evolving into multiservice organizations offering not only loans but also savings, and other financial and nonfinancial services. We contribute to the literature aimed at identifying how combining credit with savings affects outreach and sustainability in microfinance institutions (MFIs). We apply the propensity score matching method as well as its augmented dose-response version to compare the performance of loans-plus-savings MFIs with that of lending-only in a sample of 710 observations from Eastern Europe and Central Asia. Owing to our unique capital structure data, we control for the use of subsidized capital, which related work ignores while existing evidence points to tradeoffs between subsidies and savings. We find that financial performance and breadth of outreach are positively associated with savings mobilization, while the evidence on depth of outreach points to a possible mission drift. J E L C L A S S I F I C A T I O NG21, F30, O16 K E Y W O R D S economies of scope, Microfinance institutions, performance, propensity score matching, savings | 1311 KHACHATRYAN eT Al.Szafarz, 2011), which creates new forms of exclusion, this question is important for policymakers, practitioners, and scholars. The third contribution is to the discussion on mission drift by establishing differences in depth of credit outreach between savings-offering and loan-only MFIs.We use panel data from 157 MFIs operating in 19 countries in the ECA region reported by individual MFIs in the Microfinance Information Exchange (MIX) over 5 years. The capital structure variables are collected from a unique database provided by a grass-root network Microfinance Centre (MFC) and available only for 2005 to 2009 period. This explains why our panel is limited to the given period of time. We apply semiparametric quasi-experimental PSM, as well as dose-response function approaches to estimate the impact of offering savings on financial sustainability and credit outreach of MFIs. Estimation of the dose-response function (Guardabascio & Ventura, 2014) provides an opportunity to take into account the continuous nature of treatment, which in our case is the relative share of deposits. In both settings we use data on capital structure of MFIs, operations profile (age, outreach direction, profit status, risk profile), and country level macro data.Our main findings suggest that the simultaneous delivery of loans and savings is associated with better financial performance measured by return on asset (ROA) by about 3 percentage points. We also find that MFIs offering savings service have over 5,000 more borrowers, likely owing to scale economies. At the same time, those MFIs offering savings seem to focus more on richer borrowers (have lower depth of outreach, measured by the average loan size divided by the country's gross national income (GNI) per capita). These results support the ideas for mission drift for savings-collecting MFIs in ECA region. We also note that in most countries in the region, only regulate...

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“…Propensity scoring has been used in other financial studies. For example, Casu et al (2013) use propensity scoring to identify the effects of securitization on bank performance. They find that banks that securitize loans seem to have similar riskadjusted returns as banks that do not securitize loans.…”

Section: Estimation Of the Generalized Propensity Scorementioning

confidence: 99%

FHA, Fannie Mae, Freddie Mac and the Great Recession

Passmore

Sherlund

2019

Real Estate Economics

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Did government mortgage programs mitigate the adverse economic effects of the financial crisis? We find that counties with greater participation in traditional government mortgage programs experienced less severe economic downturns during the Great Recession. In particular, counties with higher levels of participation in FHA, Fannie Mae, and Freddie Mac lending had relatively smaller increases in mortgage delinquency rates; smaller declines in purchase originations, home sales, home prices, and new automobile purchases; and smaller increases in unemployment rates. These results hold both in 2009 (soon after the peak of the financial crisis) and in 2014 (six years after the crisis). The persistence of better economic outcomes in these counties is consistent with a view that mortgage originators' access to a liquidity outlet (in this case, government-backed securitization) is key to maintaining credit flows and economic growth during financial turmoil.

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Securitization and Bank Performance

Cited by 102 publications

References 102 publications

Mortgage‐backed Securitization and SME Lending During the Financial and Economic Crisis: Evidence from the Italian Cooperative Banking System

Mortgage‐backed Securitization and SME Lending During the Financial and Economic Crisis: Evidence from the Italian Cooperative Banking System

Is the model “loans‐plus‐savings” better for microfinance in Eastern Europe and Central Asia? A propensity score matching comparison

FHA, Fannie Mae, Freddie Mac and the Great Recession

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