Non-banks (including insurers and funds) can add some fire-power to European policy makers' initiatives to fund small businesses by packaging their loans into structured deals, according to Moody's Investors Service in a report published today. However, information asymmetry can expose such deals to a potential misalignment of interest between investors and portfolio managers.
"Securitisation enables investors, such as insurers and pension funds, to transform their investments into more liquid instruments and to align their risk appetite, owing to the tranching of issued notes," observes Monica Curti, a Vice President -- Senior Credit Officer at Moody's.
"Securitisation enables investors, such as insurers and pension funds, to transform their investments into more liquid instruments and to align their risk appetite, owing to the tranching of issued notes," observes Monica Curti, a Vice President -- Senior Credit Officer at Moody's.
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