Securitization

As securitization seems to be a lucrative way for banks to not only enhance liquidity and diversify risk but also improves their performance considerable incentive problems occurred during the turmoil and among the different parties. Those incentive problems led to information asymmetries and moral hazard among the involved stakeholders .As the Bank/Originator creates reference pool sells them to the bankruptcy remote trust (such as Fannie Mae or Freddie Mac) Bankruptcy remote trust buys reference

Structured asset securitization is the process through which various types of non-liquid assets such as residential mortgages, account receivables, auto loans and credit card debt obligations are sold to a special purpose vehicle (“SPV”), which uses the pool of assets as collateral for the issuance of securities to investors (Fabozzi, 2013). During an asset securitization issue, one of the central elements is that repayment depends primarily on the principal and interest cash flows from SPV’s underlying

INTRODUCTION Financial transactions are very common in today’s world. In these types of transactions, security must be created. These creations of securities are known as securitization. Security is a financial claim which is exhibited by document. The main feature of securitization is marketability. Henceforth, securitization is creation of marketable and tradable securities which is hinged on the inflows and outflows (cash flows) of the assets and liabilities of an individual. Cash flows refer

2.2 Securitisation of Islam (SOI) As discussed above, securitization theory essentially analyse how individuals perceive and react to threats. The theory recommends that a state representative can "securitize" an issue by conjuring "security" (Wæver, 1995; Huysmans, 1998a; Wæver, 2004). "Securitized" issues are

The 2007-2008 US ‘credit crunch’, also known as ‘subprime mortgage crisis’, is one of the largest financial distortions that has recently struck US economy and resulted in the huge slump in the economic activity. Actually, there most likely exists no single reason that has led to the financial crisis of such degree but rather a simultaneous combination of several practices in the US economy of that time. Experts usually distinguish the following diverse causes of 2007-2008 US ‘credit crunch’: the

Also it is involved in structuring the transaction. At the same time the underwriter provides consultations in marketing and law. Benefits and drawbacks of asset securitization Before asset securitization was created, banks lent money to households and companies and these loans existed in the banks’ balance sheets until they mature or are paid off. This creates a mismatching of assets and liabilities because typically banks use

to make the right choices in arranging the best investment plans that will benefit these investors. One of these increasingly popular methods is asset securitization. Measures in the application of this particular method have been improving, especially since the market crash of 2008. Structured finance, which is another word for securitization, is an alternative, non-standard way of raising money by creating

crisis though the unemployment rate was increased (in Walks, 2014:256). Financial crisis in general here   Chapter 2: Litterateur review For the purpose of this dissertation, I review the piece of researches discussing and examining the impact of securitization to subprime mortgage and broadly to financial crisis. Besides,

SECURITIZATION AND STRUCTURED PRODUCTS New lending strategies involving structured finance and securitization contributed widely to the meltdown of Subprime mortgages market. Under this system, banks were able to make mortgage loans that were pooled together as a mortgage-backed security (MBSs) and, then, sold into securities to investors . Moreover, in some more complex securitization, namely the collateralized debt obligation (CDOs), the

Although security is a common need, the process of securitization remains a highly contested concept across socio-economic and political spectrums. Literature, from multimedia to scholarly publications, have aligned securitization with Carl Schmitt and Michel Foucault’s analyses of sovereign power as being founded on the subjects’ fear of the state, and as relying on governmentality, respectively. Ole Waever’s work with the Copenhagen School in analyzing the mobilization of a political issue to a