Securitization allows banks to repackage and resell debt, famously explained by actress Margot Robbie in a bubble bath in the film “The Big Short.”
The European Union wants to breathe new life into a financial practice most commonly associated with causing the 2008 financial crisis as it tries to jump-start banks’ lending to the economy.
On Tuesday, the European Commission will publish a package of legislation aiming to revive the industry of “securitization,” after strict postcrisis laws almost stamped out the use of the practice in the bloc.
Securitization is the practice where banks repackage and resell debt, famously explained by actress Margot Robbie in a bubble bath in the film “The Big Short.” The engineering allows banks to move some assets off their balance sheets, giving them more space to extend new loans.
Makes more sense to control the factors that play into the investment risk through regulation instead of shutting down a useful tool for investors.
Or you can just say edgy bullshit.
It wasn’t edgy bullshit? I agree with you. I’m just saying there are a lot of “ifs” we have to depend on here. And given less than 20 years ago nations across the world did not give a shit and we saw literally all of those ifs not happening, I feel like my dig at regulatory agencies is very much warranted
Didn’t read like that to me initially but if that’s what you meant by it then my bad.
No “if” about it, that’s what I meant!
Why/how is it a useful tool?