An Asset-Backed Security (ABS) is a financial instrument that is backed by a pool of assets such as mortgages, loans, or receivables. These securities are often enhanced through credit enhancements like bank letters of credit or insurance, which improve their credit quality.
A Federal Reserve funding facility established to lend up to $200 billion on a nonrecourse basis to holders of certain AAA-rated asset-backed securities, designed to promote the flow of credit to consumers and businesses.
