Commercial Bank Failures During the Great Recession: The Real (Estate) Story

74 Pages Posted: 15 Sep 2013 Last revised: 22 Feb 2021

See all articles by Adonis Antoniades

Adonis Antoniades

National University of Singapore Business School

Multiple version iconThere are 3 versions of this paper

Date Written: February 22, 2021

Abstract

The prevalence of the originate-to-distribute model for mortgage credit in the run-up to the Great Recession, resulted in commercial banks using their residual balance-sheet capacity to fund the credit expansion of the significantly more volatile segment of non-household real estate borrowers. A thorough review of bank risk exposures and competing hypotheses indicates that bank failures after the onset of the Great Recession owed more to pre-crisis exposure to non-household real estate credit than to exposure to household mortgages or to liquidity risk.

Keywords: bank failures, Great Recession, commercial real estate, MBS, wholesale funding

JEL Classification: G21, G28, R33

Suggested Citation

Antoniades, Adonis, Commercial Bank Failures During the Great Recession: The Real (Estate) Story (February 22, 2021). Available at SSRN: https://ssrn.com/abstract=2325261 or http://dx.doi.org/10.2139/ssrn.2325261

Adonis Antoniades (Contact Author)

National University of Singapore Business School ( email )

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