Industrial Securitization

Paper Summary:

This paper examines the advantages and disadvantages of the securitization of assets. The author discusses the types of securitization. The paper relates that, if a corporation opts to securitize its assets, it then can remove certain receivables from their balance sheets, which potentially could lead to serious legal consequences, such as the situation of Enron.

From the Paper:

"The concept of corporate financial management has dramatically changed in the past decade from a system of checks and balances to a juggling act. Corporate finance involves following a set of accounting and financial principles, however some financial experts suggest that it is more of a gambling act. Intense competition between tele-coms corporations has forced corporate finance managers to juggle more than one set of balance sheets depending on whether the reporting is going to Revenue Canada or shareholders. The telecom industry is not exempt from financial disaster particularly in light of the recent failure of customer financing of tele-communications equipment."

More papers on Industrial Securitization:

• Research Paper # 115079 : "Securitization and Bank Liquidity"
• Research Paper # 25358 : "Securitization - Concept and Application"
• Essay # 61340 : "Industrial Banking Structure"

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