Table of Contents
Executive summary
2
Letter of transmittal
3
Development and growth of securitisation 5
Securitisation Structure
7
Securitisation and the Capital Market
9
Securitisation and the Capital Market
11
Future Direction and Growth of Securitisation in the Capital Markets
13
Appendix
15
Bibliography
16
References 18
Executive Summary
This report outlines the introduction and development of securitisation, looking at its origins in the American markets and its introduction and subsequent growth in the Australian market. The high levels of growth lie in the deregulation of the banking industry which has lead to the emergence of more sophisticated financial instruments, including the increased usage of securitisation as a process of selling off non-marketable assets to generate funds and manage the structure of the balance sheet. The growth in securitisation has impacted on both the global capital markets and the housing markets. Its growth created borrowing opportunities for companies that would have otherwise found it difficult access large amounts of funding.
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Stock market of BrusselsIt has also helped to reduce the cost of funds for financial institutions, and assisted in developing a more competitive housing loan market, with non ADI's, and increasingly regional banks are using securitisation as a means of increasing their funding capacity. Yet the securitisation market is ever evolving, with the introduction of Basel II in 2007 impacting of the future level of securitisation. Furthermore as financial instruments become more sophisticated it is expected that the types of assets being securitised will also evolve.
Letter of Transmittal
TO: Ms Julie Marget
FROM: Lucy Dron
DATE: 9 September 2004
SUBJECT: The capital markets process of securitisation
Here is the business report requested at the beginning of semester 2, detailing the development of capital markets in Australia and overseas.
The report explores the origins of securitisation its structure and its impact on...