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European lenders typically hold loans and impair them gradually.
The plaintiffs are a group of individual investors who hold loans on commercial properties taken over by Silar.
Banks say they are unlikely to hold loans deemed risky, and their lobbyists are pressing for legal protection on the safer ones, called qualified mortgages.
There is a strong case for allowing UCITS investment funds (Europe's equivalent of mutual funds) to be able to hold loans, for instance.
Amerasia is vulnerable to the collapse of the Flushing economy, because that is where Mr Huang finds new customers, and because he continues to hold loans tied to local businesses.
Financial companies desperately need Fannie Mae and Freddie Mac to keep buying mortgages because falling home prices and rising delinquencies are hurting their ability to make and hold loans, said Douglas Peta, a market strategist at J&W Seligman.
Similar(46)
"We've never said that holding loans is a great way to make money," said Marc Shapiro, vice chairman of J. P. Morgan Chase.
Thanks to technological wizardry, globalisation and the incentives created by Basel 1 itself, banks have moved away from holding loans on their books.
In contrast, each "clean beta" portfolio holds loans from the same borrower type and quality, possibly from different originators.
Once gravity reasserted itself and home prices fell by more than half in some of the hardest hit states, banks were stuck holding loans worth cents on the dollar, if that.
But the banks no longer hold the loans they make.
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