Commercial banks' participation in the securitization markets will increase as they search out alternative methods of funding and investors become more comfortable with new asset classes, according to a report by Fitch Investors Service.

Fitch estimates outstanding securitized assets at $2.5 trillion. Growth in collateralized bond obligations and collateralized loan obligations has been particularly dramatic, Fitch said.

Securitization can provide banks with access to cost-effective funding, aid in risk management, and provide regulatory capital, said Fitch IBCA director Sharon Weinstein.

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