|About the Book|
Worldwide economic affairs experienced remarkable changes over the last 25 years. Among them is an explosion of financial services innovations, from the growth of huge multinational financial service providers to the development of many new financialMoreWorldwide economic affairs experienced remarkable changes over the last 25 years. Among them is an explosion of financial services innovations, from the growth of huge multinational financial service providers to the development of many new financial products and services. Those new financial products include asset-backed securities, the subject of this book, Securitization. Securitization, a process which transforms illiquid financial assets into tradable commodities, is one of the most significant developments of the US mortgage markets of 1970. Securitization has already converted over $150 trillion of non-tradable assets into marketable securities. As a powerful tool of liquidity and risk management, securitization has had a tremendous impact on the welfare of the world economy. In international mortgage markets it provides cheaper financing sources, thus promoting housing demand. In the banking sector, securitization is widely used for more efficiently allocating capital, transforming risk into tradable security, and reducing the overall cost of capital. This book provides the necessary ingredients to financially engineer asset-backed securities of varying maturity and risk return profile from underlying collateral such as mortgages, vehicle loans, and any asset classes with fairly predictable cash flows. Ghassem A. Homaifar is a professor of financial economics at Middle Tennessee State University. He has been a research fellow at economic reform forum ERF since 2006. He has a master of science in industrial management from the State University of New York at Stony Brook and a PhD in finance from the University of Alabama. He authored Managing Global Financial and Foreign Exchange Rate Risk (Wiley 2004) and numerous articles appearing in the Journal of Risk and Insurance, Journal of Business Finance and Accounting, Journal of Bank Research, Advances in Futures and Options Research, Weltwirtschaftliches Archiv Review of World Economics, Applied Financial Economics, Applied Economics, Global Finance Journal, International Economics, and others.