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.
That’s kinda like saying that the water in the ocean is part of why fish are able to swim.
No, it’s like saying fire extinguishers are bad because someone replaced the real ones with gag ones in a building that burned down.
No that’s a bad analogy because no one is arguing the water should be taken away because of a misguided understanding that it’s inherently dangerous.
The actual analogy is “People have died in water, so no one should swim anymore”
But that’s obviously absurd. You hire life guards, teach people to swim, get a life vest, life savers, etc