Research Repository

Securitisation

Sarkisyan, Anna and Casu, Barbara (2019) 'Securitisation.' In: Berger, Allen and Molyneux, Philip and Wilson, John, (eds.) Oxford Handbook of Banking (3rd edition). Oxford University Press. ISBN 9780198824633

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Abstract

Securitization, a structured process involving the transformation of illiquid assets into marketable securities, experienced an exponential growth in the 1990s and early 2000s. After a prolonged period of rapid expansion, securitization markets froze in 2008, as investors lost confidence in structured products. This chapter charts the rise and fall of securitization and attempts to map the future of the market by identifying the key issues that need to be addressed: (i) alignment of incentives; (ii) reduction of complexity; (iii) increase in transparency; and (iv) improvements in the use of credit ratings. Despite its controversial role during the financial crisis, the economic importance of securitization is undeniable. Several policy interventions at the national and international levels have recently been enacted to accelerate the recovery of the market by promoting simple, transparent, and comparable (STC) securitization, as there is an emerging consensus that the benefits of high quality securitization outweigh the costs and that this technique can play a key role in fostering economic recovery and growth.

Item Type: Book Section
Divisions: Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
Depositing User: Elements
Date Deposited: 24 Feb 2020 12:26
Last Modified: 24 Aug 2021 07:15
URI: http://repository.essex.ac.uk/id/eprint/26884

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