Securitizations have always been carefully designed to enable the transferor to consolidate the securitization entity.

Question

Quizplus · Accepted Answer

Securitizations are often designed to allow the transferor to remove the securitized assets from their balance sheet, not to consolidate the securitization entity. This is achieved by transferring the assets to a special purpose entity (SPE) in a way that the transfer qualifies as a true sale, allowing the transferor to derecognize the assets.

Securitizations Have Always Been Carefully Designed to Enable the Transferor