Open AccessInternational Real Estate Review
Author(s) -
Robert Van Order
Publication year - 2018
Publication title -
journal of the asian real estate society
Language(s) - English
Resource type - Journals
ISSN - 1029-6131
DOI - 10.53383/100271
Subject(s) - moral hazard , securitization , crash , order (exchange) , business , real estate , hazard , actuarial science , financial economics , economics , finance , monetary economics , computer science , incentive , microeconomics , chemistry , organic chemistry , programming language
Securitization provides borrowers with access to capital markets, most notably as an alternative to bank lending. However, it has also used complicated structures in order to attract investors. Complicated structures can provide, and have provided, vehicles for hiding risk and inducing moral hazard, which were at the center of the Great Crash. This paper provides descriptions of structures and increasing complexity over time. It suggests where moral hazard would have been expected to show up, empirically, and provides some evidence of moral hazard based on the timing of the changes in the structures.