Loan securitization concentrated risk rather than eliminating it.

Evidence

What was wrong was that the risks inherent in these loans never really disappeared: they just got pushed elsewhere. Indeed, the process of selling on loans inadvertently concentrated those risks in short-term repo markets. So, how did everyday mortgages end up in a repo market? — Mark Blyth, Austerity, 80

Categorization

• QUESTION: The chapter proceeds to answer how mortgages reached repo markets; worth tracking the full causal chain.
• XREF: connects to: Securitization moved loan repayment risk off bank balance sheets to outside investors. — Mark Blyth, Austerity: The History of a Dangerous…, 79; Securitization made bankers believe dispersion minimized risk — Yanis Varoufakis, Technofeudalism: What Killed Capitalism, 181; Securitization names a mindset that abandons actual security for risk-juggling virtuosity — Max Haiven, Cultures of Financialization, 258 (+7 more)

Broader Connections

• Risk-spreading strategies like securitization exacerbate agency abuse rather than reducing it. #corroborates (0.88) — Shapiro, Susan P., The Social Control of Impersonal Trust, 38
• Securitization made bankers believe dispersion minimized risk #expands (0.85) — Yanis Varoufakis, Technofeudalism, 181
• Securitization names a mindset that abandons actual security for risk-juggling virtuosity #corroborates (0.82) — Max Haiven, Cultures of Financialization, 258
• Packing risky mortgages into opaque derivatives under weak regulation enabled the financial crisis #exemplifies (0.82) — Albert Bandura, Moral Disengagement, 1492
• The housing bubble traces to private securitization, not government GSE lending #expands (0.78) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 888