I do not understand it.
In: Economics
To the bank, a loan is an asset. It has value because of the monthly payments that come in. Any asset can be sold. So a bank can take 100 or 1000 loans and package them up and sort of make one really big asset out of it. That’s what securitizing means, turning loans into a bond. Then either insurance companies or investment companies or individuals can buy a part of the bond.
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