Common Structures of Asset-Backed Securities and Their Risks
AbstractIn recent years, one area of growing concern in corporate governance is the accounting and transfer of risk using special purpose entities (or trusts). Such entities are used widely in issuing asset-backed securities. This paper provides an overview of the asset-backed securities market, and discusses the common structures used in this market to transform the risks associated with the underlying collateral into risks associated with the issued securities. Understanding these structures is essential to understanding the allocation and transfer of risk among the different parties in an asset-backed transaction – the originator, the special-purpose entity, investors, and related parties such as insurance guarantors. Understanding these structures is also essential in proposing potential solutions to regulatory and accounting concerns about the transfer of risks in asset-backed securities.
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Bibliographic InfoPaper provided by EconWPA in its series Finance with number 0512012.
Length: 25 pages
Date of creation: 09 Dec 2005
Date of revision: 29 Dec 2005
Note: Type of Document - pdf; pages: 25
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Asset-backed Securities; Structured Finance; Special Purpose Entity; Seller Recourse; Corporate Governance;
Find related papers by JEL classification:
- G30 - Financial Economics - - Corporate Finance and Governance - - - General
- G20 - Financial Economics - - Financial Institutions and Services - - - General
- G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-14 (All new papers)
- NEP-FIN-2005-12-14 (Finance)
- NEP-FMK-2005-12-14 (Financial Markets)
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