224 Abstract Wo ne tehme p ci rriecdail tl y riantvi ne sgtsi gaant ed t hper i icmi npga catt oifs tshuea nrceeg uul asti onrgy ar i sska mr ept el en toi of nEmu reot ph eoadns st reecautrsi tai zl la rt ii os kn rtertaenncthi oe ns mi s seut he od disn etqhuea lpl ye. rWi o ed s2h0o1w1 -t2h0a 2t 1c .r eEdui rt orpa et ianng sr edgi fuf leart ifoonr securitization tranches of different risk retention methods. We also find that cr irsekd ri te treant itni og na mg eent chioe ds . eFxi pn ea rl liye, nwc eh emn owr ee ri na vt iensgt i dg ai st ae gtrheee mi mepnat cs t doef pt ehne ds ei nmg eotnh ot hd es on the pricing of securitization tranches, our results show that investors adjust the risk premium accordingly. Our findings strongly suggest reevaluating the different regulatory risk retention methods. Keywords: risk retention rule, primary issuance spread, credit ratings. JEL classifications: G12, G21, G24, G28.
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