asset
securitization in
2008 financial
crisis.
,Contents
• Key concepts
• What can be securitized?
• How it works? Example
• CDO? Bond Rating? CDS? Subprime mortgage?
• What happenned in 2008?
• Who benefits? Who loses?
,Key concepts
• Asset - resource with economic value that an individual,
corporation, or country owns or controls with the
expectation that it will provide a future benefit.
• Securitization - procedure where an issuer designs a
marketable financial instrument by merging or pooling
various financial assets into one group
, What can be securitized?
• Any financial asset can be securitized — turned into a
tradeable, fungible item of monetary value.
• However, securitization most often occurs with loans and
other assets that generate receivables such as different
types of consumer or commercial debt.