Bank management expertise and asset securitization policies

Tsung Kang Chen*, Hsien Hsing Liao, Jing Syuan Ye

*Corresponding author for this work

Research output: Contribution to journalArticle

1 Scopus citations

Abstract

We explore how the expertise of a bank holding company's management team affects its asset securitization policies. We find management team members with an MBA degree and top management experience securitize more low risk loans while those with core functional executive positions securitize fewer high risk loans. In addition, internal liquidity, governance quality, and risk management quality moderate these effects. Moreover, risk management concerns are the main driver of the negative effect of the percentage of core functional executives on asset securitization. We also provide evidence that core functional executives deem securitized mortgage loans riskier after the subprime crisis.

Original languageEnglish
Article number105667
JournalJournal of Banking and Finance
Volume109
DOIs
StatePublished - Dec 2019

Keywords

  • Asset securitization
  • Bank holding companies
  • Internal liquidity
  • Management team expertise
  • Risk management quality

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