2026-09-18T19:48:42Zhttps://dspace.mit.edu/server/oai/requestoai:dspace.mit.edu:1721.1/1044852026-06-17T14:43:28Zcom_1721.1_7582com_1721.1_7581col_1721.1_131022
Iván Werning, Robert Townsend and Alp Simsek.
Muley, Ameya (Ameya Sanjay)
Massachusetts Institute of Technology. Department of Economics.
Massachusetts Institute of Technology. Department of Economics
2016-09-30T19:31:35Z
2016-09-30T19:31:35Z
2016
2016
http://hdl.handle.net/1721.1/104485
958145745
Thesis: Ph. D., Massachusetts Institute of Technology, Department of Economics, 2016.
Cataloged from PDF version of thesis.
Includes bibliographical references.
In this thesis, I explore the consequences of frictions in financial intermediation. I theoretically analyse two financial contracts commonly found in the modern shadow banking system-rehypothecation and securitisation. Rehypothecation is the direct repledging of the collateral received in a debt contract by the intermediate lender, while securitisation is the use of the debt contract itself as collateral. I show that rehypothecation enables more efficient reuse of the collateral by the intermediate lender. I emphasise the role of the limited pledgeability of the intermediary in differentiating between the two contracts. In what has significant implications for monetary policy, I also show that open market operations undertaken with the intention of increasing liquidity and investment will take away collateral from the rehypothecation chain and be counterproductive to investment down the chain. I also examine the possibility of distortions created by large global financial institutions on emerging financial markets. In the context of India, I find that prices of firms that receive foreign institutional investor flows are not differentially affected relative to the firms that don't.
by Ameya Muley.
Ph.D.
125 pages
eng
Massachusetts Institute of Technology
M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.
http://dspace.mit.edu/handle/1721.1/7582
Economics.
Essays on frictions in financial institutions
Thesis
application/pdf
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Publication
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<Abstract>In this thesis, I explore the consequences of frictions in financial intermediation. I theoretically analyse two financial contracts commonly found in the modern shadow banking system-rehypothecation and securitisation. Rehypothecation is the direct repledging of the collateral received in a debt contract by the intermediate lender, while securitisation is the use of the debt contract itself as collateral. I show that rehypothecation enables more efficient reuse of the collateral by the intermediate lender. I emphasise the role of the limited pledgeability of the intermediary in differentiating between the two contracts. In what has significant implications for monetary policy, I also show that open market operations undertaken with the intention of increasing liquidity and investment will take away collateral from the rehypothecation chain and be counterproductive to investment down the chain. I also examine the possibility of distortions created by large global financial institutions on emerging financial markets. In the context of India, I find that prices of firms that receive foreign institutional investor flows are not differentially affected relative to the firms that don't.</Abstract>
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