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Chicago Fed Letter, No. 21, May 1989
Would You Buy a Car Loan From This Bank?

More than 90% of these issues were underwritten by independent investment banks. The underwriter buys the issue for a a fixed price and resells it through its distribution channels to its customers at a higher price. While commercial bank firms play a big role in issuing asset-backed securities, they have played a relatively small role in underwriting them. They would like to underwrite more but their authority to do so is limted.

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