A Study in Securitization from Relationship to Transaction

Credit is almost as old as civilization itself and has greased the wheels of commerce for several thousand years. As such commerce has been transformed by successive waves of innovation. However, it was not until the last decade of the twentieth century that financial technology began to change the basic pillars of credit which led to a qualitative transformation of credit and an increase in usage of structured credit. In the past ten years, there has been a virtual explosion in the application of structured finance products. Other than the traditional buyers of credit there have been new categories of investors like credit hedge funds that have begun to adopt a spectrum of cash and synthetic products. However, the increasing complexity of the securitization market with a set of ever evolving products invariably creates challenges in terms of efficient assembly and dissemination of information.