Findings on Insurance Discussed by Investigators at University of Texas Dallas (Neglected Risks In the Communication of Residential Mortgage-backed Securities Offerings): Insurance

2023 OCT 23 (NewsRx) -- By a News Reporter-Staff News Editor at NewsRx Policy and Law Daily -- Data detailed on Insurance have been presented. According to news originating from Richardson, Texas, by NewsRx correspondents, research stated, “Examining the contractual disclosures during the sale of private-label residential mortgage-backed securities before the 2008 financial crisis, we find that textual contents in the risk-factor section predict subsequent losses and yet were not reflected in pricing.”

Our news journalists obtained a quote from the research from the University of Texas Dallas, “Insurance companies, especially life insurers and insurers with low regulatory capital ratios, are more exposed to textual risks. Consistent with issuers hedging litigation risks with disclosure, we find that textual contents are associated with second-lien underreporting and preissuance written communications.”

According to the news editors, the research concluded: “Overall, we find that investors neglected risks in the purportedly safe assets before the crisis.”

This research has been peer-reviewed.

For more information on this research see: Neglected Risks In the Communication of Residential Mortgage-backed Securities Offerings. The Journal of Finance, 2023. The Journal of Finance can be contacted at: Wiley, 111 River St, Hoboken 07030-5774, NJ, USA.

The news correspondents report that additional information may be obtained from Harold H. Zhang, University of Texas Dallas, Naveen Jindal School of Management, Richardson, TX, United States. Additional authors for this research include Feng Zhao and Xiaofei Zhao.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1111/jofi.13278. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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