Boosting Profits and Reducing Risk: The Power of Asset Securitisation
The article discusses how banks use asset securitisation to manage profits and reduce risks associated with loans to small and medium-sized enterprises. This involves bundling loans or loan default risks together to limit exposure to individual businesses. With the growth of credit derivatives and capital markets, banks are reorganising their credit risk management units to optimise their credit portfolios. This strategy helps banks increase profits and improve their financial position.