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Asset securitizations and bank stability : evidence from different banking systems.

Abdelsalam, O. and Elnahass, M. and Ahmed, H. and Williams, J . (2020) 'Asset securitizations and bank stability : evidence from different banking systems.', Global finance journal. .

Abstract

The impact of asset securitization on the risk and performance (i.e. financial stability) of banks, both individually and systemically, is the subject of substantial debate by financial regulators and practitioners. This paper is the first to empirically examine the impact of various contractual types of asset securitizations on the financial stability of an international sample of commercial banks in 21 countries between the years of 2003 and 2012. Our results indicate that banks involved in asset securitization are generally more risky and less financially stable. Additionally, we find that, in-crisis, Islamic banks involved in a constrained model of assets securitization showed higher asset quality, in spite of being less cost efficient, in comparison to their conventional counterparts. The study provides important insights and policy implications regarding varying securitization contractual structures for banks and the influence on long-term bank financial stability.

Item Type:Article
Full text:Publisher-imposed embargo
(AM) Accepted Manuscript
Available under License - Creative Commons Attribution Non-commercial No Derivatives.
File format - PDF
(1312Kb)
Status:Peer-reviewed
Publisher Web site:https://doi.org/10.1016/j.gfj.2020.100551
Publisher statement:© 2020 This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
Date accepted:23 June 2020
Date deposited:24 June 2020
Date of first online publication:2020
Date first made open access:No date available

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