Securitization as the Financial System

The paper attempts to establish the method for comparing the traditional financial intermediation with the asset backed securitization. Understanding the function of securitization as the corporate finance skill has long been a major focus of economists, however, prior attempts to clarify its macro-economic implications have been inconclusive. Our discussion starts from stating the following question: Can the securitization be substitute for the bank oriented financial system? By using the findings of the economics of information, some possible answers to it can be reached in the last section