Inside the Federal Reserve′s Reaction to the Recent Financial Crisis论文.pptVIP

Aligning Incentives in Securitization Adam B. Ashcraft Federal Reserve Bank of New York The seven deadly frictions Friction #1: Predatory Lending Defined as the welfare-reducing provision of credit Results in “too much” lending Borrowers, especially those with bad credit, can be financially unsophisticated Some borrowers dont know best price, or cant make the right given the best prices Lenders (or brokers as their agents) can take advantage of this % of subprime mortgage with strong optionality*: 2000 (2007): 0.1% (36.8%) Resolution: state and federal anti-predatory lending laws, consume