The arti\u00adcle deve\u00adlops the hypothe\u00adsis that con\u00adven\u00adti\u00adons can be key to the deve\u00adlop\u00adment of mar\u00adkets for pre\u00advi\u00adously untra\u00added finan\u00adci\u00adal assets. It argues that the absen\u00adce of his\u00adto\u00adri\u00adcal data on the per\u00adfor\u00adman\u00adce of assets may indu\u00adce agents to form beli\u00adefs in ways that pre\u00adclu\u00adde the for\u00adma\u00adti\u00adon of mar\u00adkets for cer\u00adtain finan\u00adci\u00adal ins\u00adtru\u00adments. Con\u00adver\u00adsely, in the absen\u00adce of tra\u00adding, the data on the basis of whi\u00adch agents could revi\u00adse their beli\u00adefs will not be pro\u00addu\u00adced, giving rise to a feed\u00adback loop that hin\u00adders the pro\u00adcess of mar\u00adket-for\u00adma\u00adti\u00adon. The arti\u00adcle con\u00adtends that one of the ways of over\u00adco\u00adming this sta\u00adte is the deve\u00adlop\u00adment of con\u00adven\u00adti\u00adons about the dis\u00adtri\u00adbu\u00adti\u00adon of futu\u00adre payoffs. It then shows that the emer\u00adgen\u00adce of the con\u00adven\u00adti\u00adons that cre\u00addit rating agen\u00adci\u00ades could reli\u00ada\u00adbly mea\u00adsu\u00adre the ris\u00adki\u00adness of non-pri\u00adme resi\u00adden\u00adti\u00adal mort\u00adga\u00adge-secu\u00adri\u00adti\u00ades (RMBSs), and that the FICO sco\u00adre could reli\u00ada\u00adbly give a quan\u00adti\u00adta\u00adti\u00adve expres\u00adsi\u00adon of the cre\u00additworthi\u00adness of indi\u00advi\u00addu\u00adal bor\u00adrowers was a cru\u00adci\u00adal ena\u00adbling con\u00addi\u00adti\u00adon of the for\u00adma\u00adti\u00adon of a mar\u00adket for RMBSs in the Uni\u00adted States.<\/p>\n
Keywords<\/b>: con\u00adven\u00adti\u00ado\u00adnal valu\u00ada\u00adti\u00adon, pro\u00adba\u00adbi\u00adlity, mort\u00adga\u00adge-bac\u00adked secu\u00adri\u00adti\u00ades, cre\u00addit rating agen\u00adci\u00ades, cre\u00addit scores.<\/p>\n
JEL codes<\/b>: B29, G11, G12.<\/p>\n","protected":false},"excerpt":{"rendered":"
The arti\u00adcle deve\u00adlops the hypothe\u00adsis that con\u00adven\u00adti\u00adons can be key to the deve\u00adlop\u00adment of mar\u00adkets for pre\u00advi\u00adously untra\u00added finan\u00adci\u00adal assets. It argues that the absen\u00adce of his\u00adto\u00adri\u00adcal data on the per\u00adfor\u00adman\u00adce of assets may indu\u00adce agents to form beli\u00adefs in ways that pre\u00adclu\u00adde the for\u00adma\u00adti\u00adon of mar\u00adkets for cer\u00adtain finan\u00adci\u00adal ins\u00adtru\u00adments. Con\u00adver\u00adsely, in the absence [\u2026]<\/p>\n","protected":false},"template":"","tags":[],"made_publication_type":[78],"class_list":["post-2326","made_publication","type-made_publication","status-publish","hentry","made_publication_type-working-papers"],"acf":[],"yoast_head":"\n