This explanation seems at odds with the concept that Banks securitize to move these assets off their balance sheets. How do banks grow their loan books when they securitize, at the same time that this process removes these assets from their balance sheet? My embryonic understanding at this...
Statement 1: A common trade during 2004 and 2005 was to sell protection on the equity tranche
and buy protection of the mezzanine tranche of the CDX.NA.IG index.
Statement 2: The trade was long credit spread risk on the equity tranche and short credit
spread risk on the mezzanine tranche.
Hi...
Hi @David Harper CFA FRM
One of the listed benefits of Securitisation is the Risk diversification via pooling of assets. However, isn't that benefit available irrespective of Securitisation since all those risk segments are present in Bank's Asset base even prior to securitization.
I am sure...
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