Loan sales are likely to continue because
I. they can increase near-term reported earnings.
II. they reduce the amount of capital required.
III. more corporate borrowers have access to the commercial paper market.

Question

Quizplus · Accepted Answer

Loan sales can increase near-term reported earnings because the bank can recognize the profit from the sale in the current period. They also reduce the amount of capital required because the bank is no longer holding the loan on its balance sheet. There is no direct correlation between loan sales and corporate borrower access to the commercial paper market.

Loan Sales Are Likely to Continue Because