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Insurance Companies and the Growth of Corporate Loan Securitization

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Abstract

Collateralized loan obligation (CLO) issuances in the United States increased by a factor of thirteen between 2009 and 2019, with the volume of outstanding CLOs more than doubling to approach $647 billion by the end of that period. While researchers and policy makers have been investigating the impact of this growth on the cost and riskiness of corporate loans and the potential implications for financial stability, less attention has been paid to the drivers of this phenomenon. In this post, which is based on our recent paper, we shed light on the role that insurance companies have played in the growth of corporate loans’ securitization and identify the key factors behind that role.

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  • Fulvia Fringuellotti & João A. C. Santos, 2021. "Insurance Companies and the Growth of Corporate Loan Securitization," Liberty Street Economics 20211013, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednls:93160
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    Cited by:

    1. Kaufmann, Christoph & Leyva, Jaime & Storz, Manuela, 2024. "Insurance corporations’ balance sheets, financial stability and monetary policy," Working Paper Series 2892, European Central Bank.

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    More about this item

    Keywords

    insurance companies; CLOs; regulatory arbitrage; corporate loans; securitization;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services

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