Which of the following is a benefit of securitization for the originator of the loans? A. The originator can get more bank deposits as assets if it is a finance company. B. The originator can replace some non-interest income with interest income. C. The originator can replace a non-realized capital gain on trading securities with a servicing fee to the SPV. D. The originator can free reserves at the central bank as it has removed some credit risk. E. None of the above are benefits of securitization to the loan originator.
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The originator can get more bank deposits as assets if it is a finance company. - This is not a direct benefit of securitization. Securitization involves the sale of loans to a special purpose vehicle (SPV), not the acquisition of more bank deposits. B. The Show more…
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