Securitization

Asset securitization is the structured process whereby interests in loans and other receivables are packaged, underwritten, and sold in the form of "asset-backed" securities. 

This process enables credit originators to

  • Transfer some of the risks of ownership to parties more willing or able to manage them,
  • Access broader funding sources at more favorable rates,
  • Save some of the costs of on-balance-sheet financing, and
  • Manage potential asset-liability mismatches and credit concentrations.

Learn More

Asset Securitization (Comptroller's Handbook, November 1997)
Covers a bank's use of asset securitization as a way to generate funds, manage the balance sheet, and generate income

References