The bursting of the housing bubble that led to the Financial Crisis of 2008–2009 made the world acutely aware of the size and potential impact of the asset-backed securities (ABS) market. At the height of the bubble, the mortgage-backed security (MBS) market alone grew to nearly $2 trillion in size.
Although the size of the MBS market has been scaled back since the Financial Crisis, there is still quite a large ABS market for a range of different assets. Here’s a look at some of the largest ABS markets.
Mortgages
While many may have thought that the Financial Crisis was the end of mortgage-backed securities, that thinking is simply not accurate. After new issuances plummeted during the crisis, they have slowly and steadily crept back up ever since.
Lenders now face a whole new set of post-crisis regulatory standards, so the commercial and residential mortgage-backed securities market will likely not reach its previous peak anytime soon. However, it still represents the largest ABS class.
Auto Loans
Auto loans were actually the first asset class to become securitized. Global auto loan-backed asset issuance in 2014 reached an all-time high, approaching $100 billion.
Credit Cards
Last year, there was…
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