증권화(securitization)와 서브프라임 위기

The purpose of this paper is to explain current subprime mortgage crisis with the regard to the securitization which is known as financial innovation. Contrary to the mainstream financial economist’s idea that the securitization would improve the efficiency in the financial market and benefit both lenders and borrowers, I insist that this financial innovation is one of the major factors causing current crisis. In this paper, I show that two structural imbalances gave rise to subprime mortgage crisis; (1) the imbalance in the flow of funds between the U.S. and the other world since 1990s, (2) the imbalance in income distribution, which is associated with the fragility of middle or low income class since 1980s. The financial pressure since 1980s on the middle or low income class has made them increase the needs to borrow from financial institutions, which could be realized by the preemption of the state usury law in 1980 and the application of the individual credit rating technology to the mortgage industry in 1995. The securitization, as a financial instrument which combine the U.S. mortgage financial market with world financial market containing huge liquidity, led the world financial investors to inject large liquidity into the U.S. subpirme mortgage market, and resulting subprime mortgage boom and current crisis. In addition to the regression results that the rapid expansion in subprime mortgage lending was fueled by high growth in the securitization, the data extracted from the flow of funds accounts revealing the imbalance in households’ asset and liability position and the imbalance in the funds flow between the U.S and foreign are used to support my argument in this paper.