Securitization is a financial technique that pools assets together and, in effect, turns them into a tradeable security. Financial institutions and businesses of all kinds use securitization to immediately realize the value of a cash-producing asset.

Securitization can also have the benefit of removing a particular group of assets from a company's balance sheet. However, this will become increasingly difficult as accounting standards evolve (e.g. from US GAAP to IFRS standards). If it can be achieved, it is particularly important when the assets are in the form of debts owed to that company and the company is a bank. Residential mortgages for example, are a debt owed to a bank, but are also an exposure for the bank. Essentially, the bank is exposed, because its money is held by other people and, if those people default, then the bank may suffer loss. This exposure may well need to be reported to appropriate regulatory authorities, who may in turn restrict the amount of money a bank can lend (to potentially more profitable and secure borrowers). Securitization thus allows a bank to, essentially, sell on this exposure, and use the money for more profitable purposes. The kick is that the bank will often remain the agent for the transferee (e.g. the person who buys the debts owed to the bank). It maintains the relationship with the mortgagor (the original person who borrowed money from the bank) therefore, whilst having none of the lending risk.

Securitization has evolved from its beginnings in the 1970s to a total aggregate outstanding (as of the second quarter of 2003) estimated to be $6.6 trillion. This technique comes under the umbrella of structured finance.