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Securitisation of loans results in banks: I. Transferring the credit risk of loans from their balance sheet to other financial institutions. II. Reducing due diligence
Securitisation of loans results in banks: I. Transferring the credit risk of loans from their balance sheet to other financial institutions. II. Reducing due diligence in the loan appraisal process. III. Increasing the monitoring of these loans. IV. Freeing up capital so that they can bypass capital requirements. Only 1 is true. Only II is true. I, II and IV are true. Only III is true. Only I and II are true
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