ABS doesn’t mean weak underwriting -- BIS
There is no evidence to suggest securitization weakens credit standards, according to a Bank for International Settlements study of Italian loans to small and medium sized enterprises published on Tuesday.
In the working paper, BIS analysts find that the selection of loans to securitize based on observable performance offsets the negative presence of asymmetric information in the market, meaning that the overall quality of securitized loans is actually better than those of non-securitized loans.Asymmetric information, particularly ...
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