Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/155596
Authors: 
Bougheas, Spiros
Worrall, Tim
Year of Publication: 
2017
Series/Report no.: 
CESifo Working Paper 6354
Abstract: 
A common practice of banks has been to pool assets of different qualities and then sell a fraction of the newly created portfolios to investors. We extend the signaling model for single sales of risky assets to portfolio sales. We identify conditions under which signaling at the portfolio level dominates signaling at the single asset level. In particular, when banks have better information about loan types on their books, and some commitment power to sales, can profit by pooling assets whilst retaining a skin in the game.
Subjects: 
securitization
skin in the game
signaling
tranching
JEL: 
D82
G21
G23
Document Type: 
Working Paper

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