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The Effect of MSME Loan Securitization on Bank Stability: Collective Roles of Mediators

Author

Listed:
  • Arfan Wiraguna

    (Universitas Indonesia, Depok, Indonesia; and Universitas Prasetiya Mulya, BSD, Indonesia)

  • Rofikoh Rokhim

    (Universitas Indonesia, Depok, Indonesia)

  • Buddi Wibowo

    (Universitas Indonesia, Depok, Indonesia)

  • Roy Sembel

    (IPMI International Business School, Jakarta, Indonesia)

Abstract

This study aims at understanding the consequences of the collective roles of risks, funding cost, liquidity and regulatory capital as the mediators in the effects of the MSME loan securitization on bank stability. We use a novel dataset on the US and European MSME ABS originators over 2003 to 2022 given the US' and European Commission's roles in the programme. Our findings show that risk, funding costs, liquidity and regulatory capital collectively act as mediators. This research is the first study to look at the collective roles of mediators at play in the effect of MSME loan securitization on bank stability.

Suggested Citation

  • Arfan Wiraguna & Rofikoh Rokhim & Buddi Wibowo & Roy Sembel, 2023. "The Effect of MSME Loan Securitization on Bank Stability: Collective Roles of Mediators," Economic Research Guardian, Mutascu Publishing, vol. 13(2), pages 61-71, December.
    • Handle: RePEc:wei:journl:v:13:y:2023:i:2:p:61-71
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    References listed on IDEAS

    as
    1. Ugo Albertazzi & Margherita Bottero & Leonardo Gambacorta & Steven Ongena, 2016. "Asymmetric information and the securitization of SME loans," Temi di discussione (Economic working papers) 1091, Bank of Italy, Economic Research and International Relations Area.
    2. Arif, Ahmed, 2020. "Effects of securitization and covered bonds on bank stability," Research in International Business and Finance, Elsevier, vol. 53(C).
    3. Bertay, Ata Can & Gong, Di & Wagner, Wolf, 2017. "Securitization and economic activity: The credit composition channel," Journal of Financial Stability, Elsevier, vol. 28(C), pages 225-239.
    4. Hans J. Blommestein & Ahmet Keskinler & Carrick Lucas, 2011. "Outlook for the Securitisation Market," OECD Journal: Financial Market Trends, OECD Publishing, vol. 2011(1), pages 259-276.
    5. Bakoush, Mohamed & Abouarab, Rabab & Wolfe, Simon, 2019. "Disentangling the impact of securitization on bank profitability," Research in International Business and Finance, Elsevier, vol. 47(C), pages 519-537.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Small business; Securitization; Bank stability;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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