Chapter 4

Necessary Ingredients and Benefits of Asset Securitization

From the discussion of the previous three chapters, it is clear that the long and successful development of the U.S. asset securitization market was not accidental. Many professions with different backgrounds and expertise worked closely in the capital market to provide the needed financing for consumers and businesses. This cooperation was guided by market forces and made productive by the presence of nine elements that are conducive to asset securitization. This chapter will elaborate on these nine elements. It will also discuss in more detail the triple benefits of asset securitization to the originator, the investor, and the borrower.