Question by BeachBabe: Why do banks package loans into securities?
a. To spread the risk of default and increase liquidity.
b. To take advantage of tax breaks passed by the Federal Government as part of stimulus packages.
c. Because banking regulations require them to do so.
d. In order to get around adhering to current banking regulations.

Best answer:

Answer by Richard B
mainly because a law called “Glass -Stiegal” that required banks and financial institutions to be separate was repealed only a few decades ago

it allowed them to make bets and sell stuff that no one understood they claimed it was like buying insurance but it was really a scheme
read some robert Reiche and Richard Wolff about the resent history

“frontline had an excellent two hour show about what happened

in short a few people made huge fortunes and everybody else paid for it

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