Securitization: A Financing Vehicle for All Seasons?
Securitization is considered to be one of the biggest financial innovations of the last century. It is also regarded as both a catalyst and a solution to the 2008 financial crisis. Once a popular method of financing the mortgage and consumer credit markets, aspects of the global securitization marke...
| Main Author: | |
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| Format: | Electronic Article |
| Language: | English |
| Check availability: | HBZ Gateway |
| Journals Online & Print: | Drawer...
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| Fernleihe: | Fernleihe für die Fachinformationsdienste |
| Published: |
Springer Science + Business Media B. V
2016
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| In: |
Journal of business ethics
Year: 2016, Volume: 138, Issue: 3, Pages: 559-577 |
| Further subjects: | B
Corporate Responsibility
B Asset-backed financing B Finance B G21 B G24 B G23 B G1 B G2 B G28 B F3 B A1 B credit crisis B Asset-backed securities B Ethics B B6 B Finance ethics |
| Online Access: |
Presumably Free Access Volltext (JSTOR) Volltext (lizenzpflichtig) |
| Summary: | Securitization is considered to be one of the biggest financial innovations of the last century. It is also regarded as both a catalyst and a solution to the 2008 financial crisis. Once a popular method of financing the mortgage and consumer credit markets, aspects of the global securitization market are now struggling to revive. In this paper, I discuss the role that ethics played in securitization prior to the 2008 financial crisis and find that it is not an obvious story of moral failures, but rather that it lies in more subtle elements of the financial system. The ethics uncertainty role in the securitization story is one of flawed incentives and the shifting of responsibility for handling risk. The role of securitization and the ethics of risk transfer have rarely been discussed explicitly in the literature. The historical origins of securitization and lessons learned from previous flawed uses of the process are also provided. I also detail the various global institutional reform proposals that have taken place. Moving forward, it is crucial to understand the causes, consequences, and ethical implications of securitization in the financial crisis so as to help individuals and managers better assess risk, align incentives, and design appropriate policy responses. |
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| ISSN: | 1573-0697 |
| Contains: | Enthalten in: Journal of business ethics
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| Persistent identifiers: | DOI: 10.1007/s10551-015-2636-y |