Securitization: Boosting Liquidity and Funding While Risking Financial Crisis
Securitization is a financial process where assets are bundled together and sold to investors as securities. This helps increase liquidity, lower funding costs, and manage risks. However, it can also lead to problems like complexity and higher costs. The process played a role in the 2007/2008 financial crisis. Western Europe saw a significant amount of asset securitization activity between 2000 and 2013.