Here are the latest statistics on the US asset-backed securitization industry - the so-called "shadow banking". In spite of what has been said about ABS, it continues to be a critical source of financing in certain areas. Unlike in Europe where banks are the dominant source of credit, the US capital markets provide essential non-bank access to credit. It means that if the banking system is not ready to extend credit for some reason, other channels of liquidity may still be available (and lending doesn't come to a grinding halt as it did in Europe).
The chart below shows the total ABS outstanding over time in the US. It has peaked in 2007 at just under three trillion and has been on a constant decline as existing deals gradually roll off.
|Total US ABS outstanding ($bn; source: sifma)|
The new issuance has dropped of dramatically since the peak in 2006 and the business is now a shadow of its former self. But that's not the whole story. A large part of the rise in ABS issuance was based on home equity loans. That type of securitization stopped in 2007 with the US housing bust. To kick-start the market after the crisis, the Fed implemented the TALF program back in 2009 (also see this post). Since then a relatively small private ABS market continued to thrive.
|ABS issuance (USD MM, source: sifma)|
|ABS issuance by collateral type in 2006|
|ABS issuance by collateral type in 2011-2012 (source: sifma)|
ABS activity in Europe is a whole other story however. The biggest "taker" of the product has been the ECB since the central bank allowed ABS to be used as collateral. For further information on that market see this paper from the ECB (ht Kostas Kalevras). Note that their analysis does not seem to include the whole of 2011 - so may be a bit dated.
For those interested in learning more about the ABS process, a good reference maintained by NYU can be found here.