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It is suggested that the initial exclusion of market risk from capital requirements and high regulatory costs in the Basel I Accord, encouraged banks to

It is suggested that the initial exclusion of market risk from capital requirements and high regulatory costs in the Basel I Accord, encouraged banks to shift their risk exposure (via securitisation) from priced credit risk to unpriced market risk.

(a). Do you agree? Discuss with examples.

(b). Explain the securitisation process.

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