In a more mundane way, the packaging and sale on the bond markets of mortgage interest and credit card payments and, even the revenues from car hire purchase agreements, have become an everyday routine.
When it is carried out by banks, the usual motive is to get rid of part of the stock of loans by passing them on to securities market investors.
This frees space on the balance sheet to make new loans to bank customers.
NatWest's pounds 3.2bn securitisation sounds the same as all the other wheezes, but in fact the bank is making a brave first attempt at opening up a new part of the market that has not been attempted even in the US, the real home of securitisation.
Since the European market started in earnest in the mid-1980s, around pounds 40bn of securitisation issues have been announced, but in the US, $100bn (pounds 64bn) was sold last year alone.
It has been possible for years to sell loans individually, in the so- called secondary debt market. The differences is that NatWest is putting together a large number of corporate loans, and selling them in packaged form.
There are two reasons why nobody else has done it. Banks have been concerned that they will offend their customers, or encourage them to go straight to the securities market to raise cash themselves.
The margins on loans to large companies are also low, so most banks have scratched their heads and wondered whether it is worth going to the trouble of reselling them.
In the US, investors are prepared to spread their risks by buying a wide range of securitisation issues with different credit ratings. They, of course, have no currency risks, since it is a dollar market.
In Europe, investors tend to spread their risks in different currencies, but they demand the highest triple-A rated bonds in each.
So to get this issue away, NatWest has to get both the price and the ratings exactly right. It will not be easy.Reuse content