Multiple Choice
Loan sales and securitisation are increasingly seen as valuable tools in the management of credit risk.Which of the following are not advantageous to FIs?
A) Loan sales and securitisation allow FIs to better manage their customer relationships.
B) Loan sales and securitisation create moral hazard issues and reduce scrutiny of off-balance-sheet activities of FIs.
C) Loan sales and securitisation reduce FIs' industry and/or geographical concentration risk.
D) Loan sales and securitisation allow FIs to separate their credit risk exposure from the lending process itself.
Correct Answer:
Verified
Correct Answer:
Verified
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