Transcription of The Securitization Process
{{id}} {{{paragraph}}}
Example: confidence
The Securitization Process
Asset- backed securities The Securitization Process Prof. Ian Giddy Stern School of Business New York University Asset- backed securities q The basic idea q What's needed? q The technique q Applications q Typical sequence Copyright 2001 Ian H. Giddy The Securitization Process3. Securitization of Assets q Securitization is the transformation of an illiquid asset into a security. q For example, a group of consumer loans can be transformed into a publically-issued debt security. q A security is tradable, and therefore more liquid than the underlying loan or receivables. Securitization of assets can lower risk, add liquidity, and improve economic efficiency. q Sometimes,assets are worth more off the balance sheet than on it. Copyright 2001 Ian H. Giddy The Securitization Process4. What is the Technique for Creating Asset- backed securities ? q A lender originates loans, such as to a homeowner or corporation.
Asset -Backed Securities? qA lender originates loans, such as to a homeowner or corporation. qThe securitization structure is added. The bank or firm sells or assigns certain assets, such as consumer receivables, to a special purpose vehicle. qThe structure is legally insulated from management qCredit enhancement and rating agency reviews
Loading..
Tags:
Information
Domain:
Source:
Link to this page:
Please notify us if you found a problem with this document: