The anatomy of the mortgage securitization crisis

Neil Fligstein, Adam Goldstein

Research output: Contribution to journalArticlepeer-review

Abstract

The current crisis in the mortgage securitization industry highlights significant failures in our models of how markets work and our political will, organizational capability, and ideological desire to intervene in markets. This article shows that one of the main sources of failure has been the lack of a coherent understanding of how these markets came into existence, how tactics and strategies of the principal firms in these markets have evolved over time, and how we ended up with the economic collapse of the main firms. It seeks to provide some insight into these processes by compiling both historical and quantitative data on the emergence and spread of these tactics across the largest investment banks and their principal competitors from the mortgage origination industry. It ends by offering some policy proscriptions based on the analysis.

Original languageEnglish (US)
Pages (from-to)29-70
Number of pages42
JournalResearch in the Sociology of Organizations
Volume30
Issue numberPART A
DOIs
StatePublished - 2010

ASJC Scopus subject areas

  • Sociology and Political Science
  • Organizational Behavior and Human Resource Management

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