Essays on banking and financial innovation

This dissertation consists of three chapters. Chapters 2 and 3 examine the ex-ante motivation and the ex-post impact of securitization. Departing from the traditional literature of bank-specific drivers for securitization, I investigate the tax incentive for securitization in a cross country setting. In addition, unlike the prior micro studies of the impacts of securitization, for instance, the adverse selection in the securitization market and so forth, I study the macro impact of
securitization on real economy. Another strand of my research focuses on banking regulation, especially macroprudential regulation. I am particularly interested in the fact that banks may ex-ante take risk in anticipation of regulatory forbearance in a systemic banking crisis and its implication for macroprudential regulation. Consequently, chapter 4 analyzes systemic risk-taking at banks in the presence of “too-manyto-fail” bailout guarantee. In sum, shedding light on securitization and systemic risk-taking in the banking sector, this dissertation contributes to the policy debate on bank regulation.