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- https://socialsci.libretexts.org/Workbench/Introduction_to_Macroeconomics/07%3A_Money_Creation/7.01%3A_The_Role_of_BanksBut if a bank sells its local loans, and then buys a mortgage-backed security based on home loans in many parts of the country, it can avoid being exposed to local financial risks. (In the simple exam...But if a bank sells its local loans, and then buys a mortgage-backed security based on home loans in many parts of the country, it can avoid being exposed to local financial risks. (In the simple example in the text, banks just own “bonds.” In reality, banks can own a number of financial instruments, as long as these financial investments are safe enough to satisfy the government bank regulators.) From the standpoint of a local homebuyer, securitization offers the benefit that a local bank does…
- https://socialsci.libretexts.org/Courses/HACC_Central_Pennsylvania's_Community_College/ECON_201%3A_Principles_of_Macroeconomics_(Balic)/09%3A_Money_and_Banking/9.03%3A_The_Role_of_BanksA bank allows people and businesses to store this money in either a checking account or savings account, for example, and then withdraw this money as needed through the use of a direct withdrawal, wri...A bank allows people and businesses to store this money in either a checking account or savings account, for example, and then withdraw this money as needed through the use of a direct withdrawal, writing a check, or using a debit card. Of course, when banks make loans to firms, the banks will try to funnel financial capital to healthy businesses that have good prospects for repaying the loans, not to firms that are suffering losses and may be unable to repay.
- https://socialsci.libretexts.org/Bookshelves/Economics/Economics_(Boundless)/29%3A_The_Financial_System/29.1%3A_Introducing_the_Financial_SystemA financial intermediary is an institution that facilitates the flow of funds between individuals or other economic entities.
- https://socialsci.libretexts.org/Bookshelves/Economics/Principles_of_Macroeconomics_3e_(OpenStax)/14%3A_Money_and_Banking/14.04%3A_The_Role_of_BanksHowever, if a bank sells its local loans, and then buys a mortgage-backed security based on home loans in many parts of the country, it can avoid exposure to local financial risks. (In the simple exam...However, if a bank sells its local loans, and then buys a mortgage-backed security based on home loans in many parts of the country, it can avoid exposure to local financial risks. (In the simple example in the text, banks just own “bonds.” In reality, banks can own a number of financial instruments, as long as these financial investments are safe enough to satisfy the government bank regulators.) From the standpoint of a local homebuyer, securitization offers the benefit that a local bank does…
