RT Journal Article
SR Electronic
T1 A Public Choice Approach to the Unequal Treatment of Securities Market Participants and Home Borrowers
JF RSF: The Russell Sage Foundation Journal of the Social Sciences
FD Russell Sage Foundation
SP 94
OP 101
DO 10.7758/RSF.2017.3.1.05
VO 3
IS 1
A1 Jonathan Macey
YR 2017
UL http://www.rsfjournal.org/content/3/1/94.abstract
AB This article contrasts the protections provided to participants in U.S. securities markets with the protections provided to participants in the U.S. mortgage markets. Participants in securities markets purchase and sell equity and debt securities. Participants in the mortgage markets borrow money to buy homes, using those homes as collateral for the mortgage loans they receive. Even after Dodd-Frank, participants in securities markets are afforded significantly higher levels of protection than participants in mortgage markets. The doctrine of suitability is a prime example of this inequity. Exploring possible explanations for this odd asymmetry of treatment, I conclude that interest group politics is to blame for the anomaly.