TY  - JOUR
AU  - Loutskina,Elena
AU  - Strahan,Philip E.
TI  - Securitization and the Declining Impact of Bank Finance on Loan Supply: Evidence from Mortgage Acceptance Rates
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11983
PY  - 2006
Y2  - January 2006
UR  - http://www.nber.org/papers/w11983
L1  - http://www.nber.org/papers/w11983.pdf
N1  - Author contact info:
Elena Loutskina
Darden School
University of Virginia
100 Darden Blvd
Charlottesville VA 22903
Tel: 434-243-4031
E-Mail: Loutskinae@darden.virginia.edu

Philip Strahan
Carroll School of Management
324B Fulton Hall
Boston College
Chestnut Hill, MA  02467
Tel: 617/552-6430
E-Mail: philip.strahan@bc.edu
AB  - This paper shows that securitization reduces the influence of bank financial condition on loan supply.  Low-cost funding and increased balance-sheet liquidity raise bank willingness to approve mortgages that are hard to sell (jumbo mortgages), while having no effect on their willingness to approve mortgages easy to sell (non-jumbos).  Thus, the increasing depth of the mortgage secondary market fostered by securitization has reduced the impact of local funding shocks on credit supply.  By extension, securitization has weakened the link from bank funding conditions to credit supply in aggregate, thereby mitigating the real effects of monetary policy.
ER  -