Deposit Competition and Mortgage Securitization
Danny McGowan, Huyen Nguyen, Klaus Schaeck
Journal of Money, Credit and Banking,
Vol. 58 (2),
2026
Abstract
We study how deposit competition affects a bank's decision to securitize mortgages. Exploiting the state-specific removal of deposit market caps across the U.S. as a source of competition, we find a 7.1 percentage point increase in the probability that banks securitize mortgage loans. This result is driven by an 11 basis point increase in deposit costs and corresponding reductions in banks' deposit holdings. Our results are strongest among banks that rely more on deposit funding. These findings highlight a hitherto undocumented and unintended regulatory cause that motivates banks to adopt the originate-to-distribute model.
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DPE Courses Archive
DPE Course Programme Archive 2026 2025 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2026 IWH-DPE Foundation Course, CGDE First-year Course Macroeconomics II…
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Centre for Business and Productivity Dynamics
Centre for Business and Productivity Dynamics (IWH-CBPD) The Centre for Business and Productivity Dynamics (CBPD) was founded in January 2025 and works with policy and research…
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Output
EU Initiative TSI ProdTool 2025-2028 Find all recent project updates, reports, and event details below: ProdTool Common Report 2026 › To support evidence-based policymaking and…
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Data Protection Policy We take the protection of your personal data very seriously and treat your personal data with confidentiality and in compliance with the provisions of law…
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Halle Institute for Economic Research
Between Energy Crisis and AI Boom The summer forecast of the Halle Institute for Economic Research (IWH) assumes that the Gulf conflict eases and energy prices do not rise…
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Alumni
IWH Alumni The IWH maintains contact with its former employees worldwide. We involve our alumni in our work and keep them informed, for example, with a newsletter. We also plan…
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Cross-Subsidization of Bad Credit in a Lending Crisis
Nikolaos Artavanis, Brian Lee, Stavros Panageas, Margarita Tsoutsoura
Review of Financial Studies,
Vol. 38 (5),
2025
Abstract
We study the corporate-loan pricing decisions of a major, systemic bank during the Greek financial crisis. A unique aspect of our data set is that we observe both the actual interest rate and the “break-even rate” (BE rate) of each loan, as computed by the bank’s own loan-pricing department (in effect, the loan’s marginal cost). We document that low-BE-rate (safer) borrowers are charged significant markups, whereas high-BE-rate (riskier) borrowers are charged smaller and even negative markups. We rationalize this de facto cross-subsidization through the lens of a dynamic model featuring depressed collateral values, impaired capital-market access, and limit pricing.
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IWH-CompNet 5th FINPRO
IWH-CompNet 5th Finance and Productivity Conference 24-25 April, 2026 - Tokyo, Japan The IWH-CompNet 5th Finance and Productivity Conference (FINPRO5), held on 24–25 April 2026 at…
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Alumni
Alumni IWH provides guidance and support in job placement after graduation, including letters of recommendation and career advice. Graduates have found placements in academia…
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