ABS market

The ABS (Asset-Backed Securities) market involves creating investment products from pools of financial assets, such as loans or receivables (like car loans, credit card debt, or mortgages). Financial institutions bundle these assets and sell them as securities to investors, who receive regular payments derived from the underlying asset cash flows. This process helps lenders raise funds and diversify risk, while investors gain access to diversified income streams. The ABS market is a key part of the broader financial system, enabling the efficient allocation of credit and investment across various sectors.