What are securitizations primarily used for?

Securitizations are primarily used to raise funds for the sale of securities. This financial process involves pooling various types of financial assets, such as mortgages, auto loans, or credit card debt, and then converting these assets into securities that can be sold to investors. By doing this, the originators of the loans can obtain immediate capital, which can be used to fund additional lending or other business activities.

Through securitization, institutions can effectively transfer the risk associated with the underlying assets to investors, while gaining liquidity. This method not only helps in managing risk but also enhances the ability of the originators to access funds at potentially lower costs, benefiting the overall financial system.

The other options do not accurately define the primary purpose of securitizations. Buying corporate bonds pertains to a different financial activity altogether. Underwriting insurance policies involves assessing risks in a separate industry, while assessing credit risk is a function that may occur within the context of securitizations but does not encapsulate their primary goal of raising capital.