Which of the following accurately describes the process of securitization?
A) the process of substituting securities for deposits in bank balance sheets
B) the process of making some or all of the loan portfolios marketable by establishing pools of loan interest (securities) in the pool
C) the process of buying securities
D) none of the above

Question

Quizplus · Accepted Answer

Securitization involves pooling various types of contractual debt such as mortgages, car loans, or credit card debt obligations and selling their related cash flows to third-party investors as securities, which may be described as bonds or pass-through securities. This process transforms illiquid assets into a liquid form, making them marketable to investors.

Which of the Following Accurately Describes the Process of Securitization