Which of the following is not a factor that may tend to increase loan sales in the future?
A)There is an increased trend to apply credit ratings to loans offered for sale, increasing the attractiveness to secondary market purchasers.
B)Because of their special credit monitoring skills, FIs have a comparative advantage in making loans to below-investment grade companies and then selling the loan.
C)The trend towards marked-to-market accounting for assets makes bank loans more like securities so they may be easier to sell.
D)The risk-based capital requirements of the Bank for International Settlements give banks a strong incentive to sell housing loans to decrease their amount of risky assets.

Question

Quizplus · Accepted Answer

The risk-based capital requirements of the Bank for International Settlements give banks a strong incentive to sell housing loans to decrease their amount of risky assets. This means that selling loans, specifically housing loans, would decrease the amount of risky assets that a bank holds and thus help them meet regulatory requirements. Therefore, it is a factor that would tend to increase loan sales in the future. The other choices (A, B, and C) all provide factors that would increase loan sales in the future.

Which of the Following Is Not a Factor That May