Banks may relax scrutiny of securitised loans – ECB paper
Credit quality of euro-denominated loans falls after securitisation, researchers say
Banks may relax their scrutiny of loans once they have securitised them, leading to a deterioration in the loans' credit quality, a working paper published by the European Central Bank (ECB) says.
In Securitization and credit quality, Alper Kara, David Marques-Ibanez and Steven Ongena use what they say is a "uniquely detailed data set from the euro-denominated syndicated loan market". They note that banks are usually better informed on the loans they originate than are other financial
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