商业银行管理Chap009.pptVIP

Securitizing Loans and Other Assets (continued) Examples of Types of Securitized Assets Residential Mortgages – the beginnings of securitization The role of GSEs (GNMA, FNMA, FHLMC) Riskier CMOs Home Equity Loans Automobile Loans Commercial Mortgages Small Business Administration Loans Mobile Home Loans Credit Card Receivables Truck Leases Computer Leases EXHIBIT 9–4 Securitization Activities of FDIC-Insured Depository Institutions, 2010 Securitizing Loans and Other Assets (continued) Advantages of Securitization Diversifies a bank’s credit risk exposure Creates liquid assets out of illiquid assets Transforms these assets into new sources of capital Allows the bank to hold a more geographically diversified loan portfolio Allows the bank to better manage interest rate risk Allows the bank to generate fee income Securitizing Loans and Other Assets (continued) Securitization has increased regulators’ concerns about the soundness and safety of individual lenders and the financial system, especially in the wake of the 2007–2009 credit crisis Regulators today are looking closely at The risk of having to come up with large amounts of liquidity in a hurry to make payments to investors holding asset-backed securities and cover bad loans The risk of agreeing to serve as an underwriter for asset-backed securities that cannot be sold The risk of acting as a credit enhancer and underestimating the need for loan-loss reserves The risk that unqualified trustees will fail to protect investors in asset-backed instruments The risk of loan servicers being unable to satisfactorily monitor loan performance and collect monies owed lenders and investors Sales of Loans to Raise Funds and Reduce Risk Loan sales are carried out today by financial firms of widely varying sizes Among the leading sellers of these loans are Deutsche Bank, JP Morgan Chase, the Bank of America, and ING Bank of the Netherlands Only a minority of U.S. depository institutions report regular and significant asset sal