Asset-Backed Securities (ABS) Market: Growth, Trends, and Future Outlook

Introduction

The Asset-Backed Securities (ABS) market represents a vital segment of the global capital markets. ABS are fixed-income instruments backed by pools of underlying financial assets such as auto loans, credit card receivables, student loans, equipment leases, or mortgages. By transforming illiquid assets into tradable securities, ABS provide investors with diversification opportunities and issuers with access to additional funding sources.

Market Overview

The global ABS market has grown steadily since its development in the 1980s, with the U.S. and Europe leading issuance. While the 2008 financial crisis temporarily disrupted investor confidence, recent years have seen a resurgence driven by low interest rates, demand for yield, and regulatory improvements.