Question: What is securitization? What are the steps involved in securitization of loans? Explain briefly. What is a Mortgage Back Security (MBS)? Discuss at least one

  1. What is securitization?
  2. What are the steps involved in securitization of loans? Explain briefly.
  3. What is a Mortgage Back Security (MBS)?
  4. Discuss at least one of the driving forces of securitization?
  5. What is a repo agreement? Briefly explain.
  6. Do you think government bailout of financial institutions during financial crisis of 2008 can increase moral hazard? Explain your answer.
  7. Why failure of (commercial) banks and many other financial intermediaries (such as investment banks) can lead to a recession, such as the one observed after 2008 financial crisis? (Hint: your answer should relate to role of financial intermediaries and asymmetric information).

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