RISKS AND PROSPECTS OF SECURITIZATION OF BANKING ASSETS THROUGH THE USE OF MONEY SURROGATE

Abstract

The main risk, which is currently characteristic of most domestic banking institutions, is the presence of illiquid assets. The emergence of such a risk is caused by the spread and increase in the role of non-financial banking instruments, which leads to the acceleration of the rotation of financial resources in the conditions of active development of the mortgage securities market. To manage this risk, banking institutions, especially in Western countries, actively use the securitization mechanism. The study compares the main theoretical approaches to the concept of securitization, substantiates the relevance of the use of the securitization mechanism by modern banking facilities, and determines the role of securities in the process of transforming illiquid bank assets. The main advantages of the securitization process for its main participants, especially banking institutions and investors, are defined. Securitization of bank assets, in particular with the use of monetary surrogates, has significant potential for improving the efficiency of the financial system and attracting additional investments. The characteristics of the main types of asset securitization were considered, their basic components were determined, and a description of possible risks was performed. Securitization creates liquidity by allowing retail investors to buy shares in instruments that would otherwise be unavailable to them. An MBS investor can purchase a portion of mortgage loans and receive regular income from interest and principal payments. In the securitization process, monetary surrogates can be used to create a pool of assets that can then be sold to investors as securities. This allows financial institutions to free up capital for new loans and reduce their risks by spreading them among different investors. However, to achieve these prospects, it is necessary to carefully manage risks and improve the regulatory framework. Cash surrogates in the securitization process may include cash deposits, mortgage loans, credit obligations, and other types of assets. This process helps create new opportunities for investors and borrowers, as well as promotes liquidity in financial markets.