Keywords: Margin accounts; Buying on margin; short selling; Prime brokerage;
Citation:
Hanson, Samuel G. "Margin Accounts." Harvard Business School Background Note 218-079, January 2018. (Revised March 2018.) View Details|
Article Journal of Financial Economics June 2013 Are There Too Many Safe Securities? Securitization and the Incentives for Information Production |
Abstract
We present a model that helps explain several past collapses of securitization markets. Originators issue too many informationally insensitive securities in good times, blunting investor incentives to become informed. The resulting endogenous scarcity of informed investors exacerbates primary market collapses in bad times. Inefficiency arises because informed investors are a public good from the perspective of originators. All originators benefit from the presence of additional informed investors in bad times, but each originator minimizes his reliance on costly informed capital in good times by issuing safe securities. Our model suggests regulations that limit the issuance of safe securities in good times.
Keywords: Information; Debt Securities; Financial Crisis;
Citation:
Hanson, Samuel G., and Adi Sunderam. "Are There Too Many Safe Securities? Securitization and the Incentives for Information Production." Journal of Financial Economics 108, no. 3 (June 2013): 565–584. (Internet Appendix Here.)
