We survey the literature on securitization and lay out a research program for its open questions. Securitization is the process by which loans, previously held to maturity on the balance sheets of financial intermediaries, are sold in capital markets. Securitization has grown from a small amount in 1990 to a pre-crisis issuance amount that makes it one of the largest capital markets. In 2005 the amount of non-mortgage asset-backed securities issued in U.S. capital markets exceeded the amount of U.S. corporate debt issued, and these securitized bonds - even those unrelated to subprime mortgages -- were at center of the recent financial crisis. Nevertheless, despite the transformative effect of securitization on financial intermediation, the literature is still relatively small and many fundamental questions remain open.
Thanks to Thomas Bonczek, Henry Hansmann, George Pennacchi, Robert Sitkoff, Rene Stulz, and Nancy Wallace for comments and suggestions. Also, thanks to Richard Cantor, William Black, Erkan Erturk, Ildiko Szilank, and Julia Tung for help with data. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.