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Banks securitize assets by combining debt instruments and standardizing them to increase their
liquidity, lowering the cost of capital to borrowers and transferring the risk to investors. This
process is called securitization. Consider the following case: Ble Bank holds in excess of $200
million in its mortgage and credit line portfolios. it is considering setting up a special purpose
vehicie (SPV) and packoging the debt into asset-becked commercial paper (ABCP) in order to
increase its loan capacity.begin{tabular}{|c|} hline a credit default swap hline a convertible security
a collateralized debt obligation (CDO) hline end{tabular}

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