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Banks Became Increasingly Involved in the Securitisation of Loans in the 1980s

Question 26

Multiple Choice

Banks became increasingly involved in the securitisation of loans in the 1980s and 1990s because securitisation:


A) allows banks to reduce the amount of risky assets,and therefore to reduce capital requirements.
B) provides a use of funds that pays more interests than others.
C) allows banks to generate interests from the securitisation process.
D) allows banks to buy some loans from other banks.

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