The Role of Securitization in Countries’ Economic Growth and Development (Focus on Need to Deployment of Securitization Market in IRAN)

Subject Areas : Journal of Investment Knowledge

Vahid Zandie ¹ , Saeed Zandie ²

1 - Student of PhD in Finance, Tehran Sciences and Researches Branch of Islamic Azad University Affiliated Author
2 - Student of MS in Industrial Engineering, Qazvin Sciences and Researches Branch of Islamic Azad University

Received: 2015-01-22 Accepted : 2015-03-01 Published : 2015-03-01

Keywords: Securitisation, Economic Growth and Developmen, Economic Freedom, Islamic Financial Instruments ,

Abstract :

In every economic, Securitisation is equally necessary of structured finance markets. The upshot of desired structured Securitisation is to invent marketable securities with better liquidity for financial claims. Securitisation process enables investors to improve their risk management, to earn better modified returns and to access more liquidity. Debt conversion to a marketable asset, creates the great financial Communications between individual borrowers and vast capital markets. The participants in financial markets include the investors who have different needs to meet their investment goals, continue to comply with their risk and return requirements. Therefore, trenching various risks to credit risk and interest rate risk, prioritizing the investors who enter to securities market with structuring the market, has economic concept. Previous studies have demonstrated the correlation between economic growth and progress of economic freedom indices. In this research, we found that the relationship between development in securitization market and financial freedom is statistically significant in some developed countries. Also, it’s proved that there is positive linear correlation between Islamic Financial Instruments (SUKUK) issuances as structured financing as well as Securitisation and overall economic freedom and/or investment freedom and/or financial freedom in Islamic developing countries. Studying current situation of Securitisation in Iran demonstrated there is relative gap in comparative of objective countries in group of Islamic countries for use of SUKUK, and in the other word, Securitisation, in Islamic financing markets. However, effective proceedings accomplished for deploying Islamic Financial Instruments (SUKUK) markets in Iran, but to achieve economic development, expedition in this deployment is unavoidable necessity.

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