The Future of Securitization
What's in the cards for one of Wall Street's most important financing tools?
May 26, 2008
It's one of Wall Street's most important financing tools, and may hold a place next to the likes of Coca-Cola and Mickey Mouse as one of America's biggest exports. Securitization--the practice of reselling regular payments made by consumers on mortgages, credit cards and student loans--has indeed been readily embraced worldwide. But, the process has come under greater scrutiny and plenty of criticism since the start of the credit crisis last summer. There have been questions about lending practices when it comes to bonds pooling mortgage debt and home equity debt, and some investors now question how certain securities ever attained a AAA rating to begin with.
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