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Gathering fourteen lectures by the pioneers of securitization and by current practitioners — from Freddie Mac, Paine Webber, JP Morgan, Chrysler, McKinsey & Co, and other major players — A Primer on Securitization introduces readers to America's newest system of raising capital: what it is, how it operates, and what difference securitization makes.The securitization process bypasses financial intermediaries that have historically collected deposits and loaned them to those seeking funds, and links borrowers directly to money and capital markets. Although little has been written about what is perhaps one of the most important innovations to emerge in financial markets since the 1930s, securitization has revolutionized the way that the borrowing needs of consumers and businesses are met. Today, for example, over two-thirds of all home loans are being securitized, along with substantial percentages of auto loans and credit card receivables, and the process continues to expand into new fields including synthetic securities.Authoritative and practical, these lectures show how securitization was developed to fill a gap in financial markets.
They discuss the nature and causes of the market imperfections that made securitization a valuable source of funds, and describe how securitization has linked local mortgage markets with international capital markets. Readers will gain a broad perspective of the different parties — the borrower, the loan originator, the servicer, the rating agency, the special purpose vehicle, the credit enhancer, the underwriter, and the investor — as well as a detailed analysis of how these parties relate to one another. From the inception of the secondary mortgage market through the collapse of the Granite funds, readers will learn not only about the success but also about the excesses and failures that typically accompany the development of any product in the real or financial sector.
|1||Securitization: New Era in American Finance||1|
|2||Securitization's Role in Housing Finance: The Special Contributions of the Government-Sponsored Enterprises||17|
|3||The Origins of Securitization, Sources of Its Growth, and Its Future Potential||31|
|4||The Securitization of Commercial Property Debt||45|
|5||How Public Corporations Use Securitization in Meeting Financial Needs: The Case of Chrysler Financial Corporation||55|
|6||The Contributions of the Resolution Trust Corporation to the Securitization Process||67|
|7||The Role of Rating Agencies in the Securitization Process||81|
|8||The Workings of Private Mortgage Bankers and Securitization Conduits||91|
|9||Securitization from the Investor View: Meeting Investor Needs with Products and Price||103|
|10||The Role of Pension Funds and Other Investors in Securitized Debt Markets||117|
|11||The Place of Securitization in the Financial System: Implications for Banking and Monetary Policy||129|
|12||The Use of Securitization by Investors and Issuers in International Markets||139|
|13||A Case Study in International Securitization: Meeting the Needs of Developing Nations||153|
|14||The Risks, Potential, and Promise of Securitization||171|
Posted December 31, 2002
Editors Leon T. Kendall and Michael J. Fishman adapted these first-hand accounts of the early years of the securitization industry from a lecture series at the Kellogg School of Management. The contributions from financial service pioneers are the book¿s greatest strength. They elucidate the economic and regulatory forces that made securitization a powerful, versatile financial tool. Each chapter stands alone, but the book does not follow a linear narrative. Caveat lector: these lectures were given in 1994, so the sections on current trends and future expectations are out-of-date. Hence, this primer doesn¿t cover massive changes in financial regulation, an explosion in the types of asset-backed securities (ABSs), the popularity of derivatives or off-balance-sheet accounting to hide fraud. We from getAbstract suggest this book for those entering the financial services industry or for those who need background history. This does not tell you how today¿s capital markets work, but it is an illuminating eyewitness account of yesterday¿s.Was this review helpful? Yes NoThank you for your feedback. Report this reviewThank you, this review has been flagged.