securitization

Vocabulary Word

Definition

'Securitization' is a financial method where a company takes loans, mortgages, or other types of debts and packages them together to create a security which can be traded.

Examples in Different Contexts

In fintech, developing 'securitization' platforms can innovate financial markets. A fintech entrepreneur might assert, 'Our platform leverages cutting-edge technology to facilitate securitization processes, democratizing access to investment opportunities and diversifying risk.'

Practice Scenarios

Tech

Scenario:

We're looking for a more efficient way to raise investment capital through our platform. The potential in our debt portfolio is untapped.

Response:

That's a good point. We could definitely consider securitization as an option to tap into the potential of our debt portfolio.

Academics

Scenario:

The 2008 financial crisis revolved heavily around mortgage-backed securities. These complex financial instruments played a key role.

Response:

Absolutely, securitization played a large part, especially with the infamous 'toxic' mortgage-backed securities.