Banks securitize assets by combining debt instruments and standardizing them to increase their liquidity, lowering the cost of capital to borrow transferring the risk to investors. This process is called securitization. Consider the following case: Big Bank holds in excess of $200 million in its mortgage and credit line portfolios. It is considering setting up an alternative to protect itself against a loss and to reduce the credit risks on the money it loaned. Banks securitize assets by combining debt instruments and standardizing them to increase their liquidity, lowering the cost of capital to borrowers and transferring the risk to imvestors. This process is called securitization. Consider the following case: Big Bank holds in e: itself against a loss credit line portfolios. It is considering setting up an alternative to protect ney it loaned