Why is securitization important?

Securitization is important because it transforms illiquid assets, such as loans and mortgages, into marketable securities, enhancing liquidity in financial markets. This process allows institutions to raise capital more efficiently, spreading risk among a broader base of investors. Additionally, securitization can lower borrowing costs for consumers by increasing the availability of credit. Overall, it plays a crucial role in financial stability and economic growth by facilitating the flow of capital.