- CFA Exams
- 2022 Level I
- Study Session 13. Fixed Income (1)
- Reading 42. Introduction to Asset-Backed Securities
- Subject 1. Benefits of Securitization for Economies and Financial Markets
Why should I choose AnalystNotes?
Simply put: AnalystNotes offers the best value and the best product available to help you pass your exams.
Subject 1. Benefits of Securitization for Economies and Financial Markets PDF Download
Securitization repackages relatively simple debt obligations, such as bank loans and consumer loans, into more complex structures. It then uses the cash flows from the pool of debt obligations to pay off the bond created in the process.
Securitization has several benefits:
- Investors can have direct access to mortgages and portfolios of receivable that would be unattainable if all the financing were performed through banks.
- Banks can remove assets from their balance sheets, therefore increasing the pool of available capital that can be loaned out.
- Borrowers can pay lower costs when borrowing.
The end result is lower cost and risk, more liquidity, and improved economic efficiency.
Learning Outcome Statementsa. explain benefits of securitization for economies and financial markets;
CFA® 2022 Level I Curriculum, , Volume 4, Reading 42
User Contributed Comments 0
You need to log in first to add your comment.
I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
My Own Flashcard
No flashcard found. Add a private flashcard for the subject.