Suppose that the assets of Commonwealth Bank of Australia (CBA) includes $10 billion in long-term home mortgages. Further, suppose that the CBA needs an additional $2 billion to finance new mortgages but does not want to issue additional debt. Advise the Board of CBA on how to use securitisation to raise the needed funds to finance the new mortgages. Explain your answer in detail, including the features of securitization.

Answer rating: 100% (QA)

Securitization is a financial practice that involves pooling together various types of debt such as mortgages and selling them to investors as securit... View the full answer