There are also many banks willing to hold ABSs 1, but are reluctant to do so, for reasons that I will address later. So we have a situation where certain banks own assets with risks and capital charges that they do not wish to bear. On the other side, there are investors who are willing to bear those risks.
In my view, this is a match that should happen in an efficient financial system, and securitisation of SME loans is the way to achieve it. What is more, the funds received by banks from transferring bundled SME loans to outside investors can help support new lending, also to SMEs, and in turn support further securitisation.