August 2014
Beginner
384 pages
13h 51m
English
Content preview from Financial Markets, Banking, and Monetary Policy
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.
CHAPTER 9 Securitization
WHAT YOU WILL LEARN IN THIS CHAPTER
- The meaning of securitization.
- How unbundling of the standard loan product occurs as a result of securitization.
- Challenges caused by asymmetric information and adverse selection.
- What is meant by regulatory arbitrage.
- The alphabet soup of securitized products: MBSs, ABSs, CDOs, CLOs, CBOs, and CMBSs.
- The key role played by Fannie Mae and Freddie Mac in the MBS market and thereby the mortgage market.
- How the process of building structured securities involves parsing the cash flows from the underlying loans into separate types of securities.
- How the financial crisis set back many types of securitization.
- How securitization acts to integrate credit markets more tightly.
- How securitization creates value added.
- How monetary policy has become more effective as securitization has developed.
BACKGROUND
When people buy a home or refinance, what happens to the new mortgage (home loan) that gets made? Does the lender hold on to the mortgage—having to fund it for as long as the loan exists—or does another party acquire and fund the mortgage? What about ordinary credit card and auto loans? What happens to them? Does securitization play a role here? If so, what is meant by securitization? Is securitization the wave of the future or was it a flash in the pan that the financial crisis demonstrated to be seriously flawed?
Securitization refers to the process by which ordinary, illiquid loans are placed in a pool of other assets ...
Become an O’Reilly member and get unlimited access to this title plus top books and audiobooks from O’Reilly and nearly 200 top publishers, thousands of courses curated by job role, 150+ live events each month,
and much more.
Read now
Unlock full access
More than 5,000 organizations count on O’Reilly
O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.Julian F.
I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.Addison B.
I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.Amir M.
I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.