Securitisation led to subprime growth
The introduction of automated underwriting and securitisation caused the US subprime loans market to expand, according to two International Monetary Fund (IMF) researchers.
John Kiffs and Paul Mills, who work at the Fund's monetary and capital markets department, said that securitisation facilitated growth by dispersing risk.
Kiffs and Mills criticised the "excessive trust" that investors placed in ratings agencies' structured credit ratings. However, the researchers acknowledged that the
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