Securitization, Benefits and Abuses
Session
Management, Business and Economics
Description
Deregulation enabled the development of a strong competition between banking and other financial institutions. In finding new sources of funds to finance activities, banks also use the instrument of securitization. Securitization is the process of converting part of the assets of the banks (mostly with a reduced value) into separate forms (securities) that are acceptable (upmarket securities) for investors on the secondary market. Securitization as a modality refers to the process by which loans are converted into liquid assets by issuing securities based on previously approved loans. Some authors, who strive to determine the content of the term in the broadest sense, define securitization as a process that turns financial relations into a business transaction. With securitization, non-liquid financial instruments (credits, loans, liabilities) are converted into liquid, easy-to-trade securities. Most often they are called collateralized securities because they are defined in the assets along with the pledge.
Keywords:
Securitization, stocks, banks, benefits, abuses
Proceedings Editor
Edmond Hajrizi
ISBN
978-9951-550-50-5
Location
UBT Kampus, Lipjan
Start Date
29-10-2022 12:00 AM
End Date
30-10-2022 12:00 AM
DOI
10.33107/ubt-ic.2022.425
Recommended Citation
Dodevska, Vesna Paunkoska and Nuredini, Bashkim, "Securitization, Benefits and Abuses" (2022). UBT International Conference. 440.
https://knowledgecenter.ubt-uni.net/conference/2022/all-events/440
Securitization, Benefits and Abuses
UBT Kampus, Lipjan
Deregulation enabled the development of a strong competition between banking and other financial institutions. In finding new sources of funds to finance activities, banks also use the instrument of securitization. Securitization is the process of converting part of the assets of the banks (mostly with a reduced value) into separate forms (securities) that are acceptable (upmarket securities) for investors on the secondary market. Securitization as a modality refers to the process by which loans are converted into liquid assets by issuing securities based on previously approved loans. Some authors, who strive to determine the content of the term in the broadest sense, define securitization as a process that turns financial relations into a business transaction. With securitization, non-liquid financial instruments (credits, loans, liabilities) are converted into liquid, easy-to-trade securities. Most often they are called collateralized securities because they are defined in the assets along with the pledge.