{"id":24418,"date":"2015-02-21T18:30:23","date_gmt":"2015-02-21T18:30:23","guid":{"rendered":"http:\/\/vskills.in\/certification\/blog\/?p=24418"},"modified":"2024-04-03T13:15:31","modified_gmt":"2024-04-03T07:45:31","slug":"asset-backed-securities","status":"publish","type":"post","link":"https:\/\/www.vskills.in\/certification\/blog\/asset-backed-securities\/","title":{"rendered":"Asset Backed Securities"},"content":{"rendered":"<p style=\"text-align: center;\"><a ref=\"magnificPopup\" href=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/asset-backed-securities.png\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-25585\" alt=\"asset-backed-securities\" src=\"http:\/\/vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/asset-backed-securities.png\" width=\"160\" height=\"160\" srcset=\"https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/asset-backed-securities.png 160w, https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/asset-backed-securities-150x150.png 150w, https:\/\/www.vskills.in\/certification\/blog\/wp-content\/uploads\/2015\/02\/asset-backed-securities-55x55.png 55w\" sizes=\"auto, (max-width: 160px) 100vw, 160px\" \/><\/a><\/p>\n<p>The issue of asset backed securities is the process whereby traditional bank assets (for\u00a0example, mortgages) are sold by a bank to a trust or corporation, which is turn sells the\u00a0assets as securities. The bank could issue a bond with the pooled assets acting as collateral,\u00a0but the credit rating of the bank is assigned to the new security, the proceeds of the bond\u00a0are subject to reserve requirements, and the assets are included in any computation of the\u00a0bank\u2019s capital ratio.<\/p>\n<p>&nbsp;<\/p>\n<p>The bank can avoid these constraints if a separate entity is established (special purpose\u00a0vehicle, SPV, or trust). The bank sells the asset pool to the SPV, who pays for the assets\u00a0from the proceeds of the sale of securities.<\/p>\n<p>&nbsp;<\/p>\n<p>Effectively, while the process commences in an\u00a0informal market (the bank locates borrowers and makes the loans), asset backed securitisation means a large number of homogeneous loans (in terms of income\u00a0streams, maturity,credit and interest rate risks) are bundled together and sold as securities on a formal market.<\/p>\n<p><a href=\"http:\/\/www.vskills.in\/certification\/accounting-banking-and-finance\">Click here for government certification in Accounting, Banking &amp; Finance<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The issue of asset backed securities is the process whereby traditional bank assets (for\u00a0example, mortgages) are sold by a bank to a trust or corporation, which is turn sells the\u00a0assets as securities. The bank could issue a bond with the pooled assets acting as collateral,\u00a0but the credit rating of the bank is assigned to the&#8230;<\/p>\n","protected":false},"author":625,"featured_media":25585,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[1519],"tags":[2233,2235,2234],"class_list":["post-24418","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting-banking-and-finance","tag-asset-backed-securities","tag-collateral","tag-mortgages"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.3 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Asset Backed Securities - Vskills Blog<\/title>\n<meta name=\"description\" content=\"What are asset backed securities and SPV need?\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.vskills.in\/certification\/blog\/asset-backed-securities\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Asset Backed Securities - 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