A Primer on Securitization
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.
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.
HardcoverOut of Print ISBN: 9780262112116 199 pp. | 9 in x 6 in
Paperback$5.75 X | £4.99 ISBN: 9780262611633 199 pp. | 9 in x 6 in
Securitization has had a major impact on the US capital markets. Yet, little has been written about this process. This book of lectures will fill an important void that exists among professionals and others who follow the capital markets. The securities industry will also find this document useful to help educate others such as policymakers about our industry.
Jeffrey M. Schaefer
Senior Vice President and Director of Research, Securities Industry Association
Leon Kendall and Michael Fishman provide the student of finance with an excellent insight into the causes and consequences of securitization and the process of financial innovation. The lectures are well balanced, practical, and presented with authority. Reading them is a chance to communicate with some of the great minds of Wall Street, corporate America and the land in between, known as the government sponsored enterprise. This book will raise serious debate and deep questions.
Professor of Finance, Temple University, and editor of The Financier
A Primer on Securitization does a very good job of explaining what securitization is, how it is accomplished, and what difference it makes. The coverage of the book is impressive, ranging from the basics of securitization to more recent developments in international markets, to the effect of the process on monetary control. The chapters are informative, and are written by many of the top names in the field. An excellent book.
R.W. Purcell Professor of Finanace, Cornell University