Securitization of Financial Assets

Author: Timothy C. Leixner


Mortgage backed (MBS) and asset backed (ABS) securitizations, or more generally, the securitization of financial assets (for purposes of this outline, Securitizations), is a form of structured finance initially developed in the early 1980’s in MBS format. It matured in the late 1980’s in both MBS and ABS formats and is now a U.S. $2+ trillion industry in the U.S. alone. In recent years, it has spread to Europe (the largest market outside the U.S.), Latin America and Southeast Asia (primarily Japan), and the worldwide market is estimated to be in excess of U.S.$4 trillion.

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