Newsweek: Chasing Stiglitz

[....] As far back as 1990, Stiglitz argued in a paper (it can be found on The Economist's Voice Web site at www.bppress.com) against securitizing mortgages and selling them because "when banks retained the mortgages which they issued, they had greater incentives to screen loan applicants." He asked, again with startling prescience: "Has securitization been a result of more efficient transactions technologies, or an unfounded reduction in concern about the importance of screening loan applicants?"
http://www.newsweek.com/id/172092

[ This article is slanted and spun in places, but overall has good detailed readable information. -- MN ]