THE GLOBAL ECONOMIC MELTDOWN Economies of the world all have their periods of rise and fall. No economy can experience total stability over a period of time- there must be some forms of rise or fall in the stability of the economy. Today‚ virtually every country in the world is affected by what happens in other countries. Some of these effects are a result of political events‚ such as the overthrow of one government in favor of another. But a great deal of the interdependence among the nations
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Assets June 2014 Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages‚ commercial mortgages‚ auto loans or credit card debt obligations and selling said consolidated debt as bonds‚ pass-through securities‚ or collateralized mortgage obligation (CMOs)‚ to various investors. The principal and interest on the debt‚ underlying the security‚ is paid back to the various investors regularly. Securities backed by mortgage receivables are called
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THE 2007-2008 FINANCIAL CRISIS: CAUSES‚ IMPACTS AND THE NEED FOR NEW REGULATIONS The initial cause of the financial turbulence is attributed to the U.S. sub-prime residential mortgage market. The sustained rise in asset prices‚ particularly house prices‚ on the back of excessively accommodative monetary policy and lax lending standards during 2002-2006‚ increased innovation in the new financial instruments‚ unusual low interest rates resulted in a large rise in mortgage credit to households; particularly
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prompts banks to issue large amount of housing loans. To transfer default risk embedded in those loans‚ investment banks package those loans and mortgages into student loans‚ car loans and credit card debt‚ which form the so-called collateralized debt obligation (CDOs). All these derivatives depend on the housing loans. In the era of low interest rates‚ house prices rise rapidly and promote the rapid development of the housing loans business. With steady stream of housing loans into financial derivatives
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CDOs • Risk associated with Investing in CDOs • Fair spread estimation with Monte Carlo Simulation • CASE STUDY: HVB ASSET MANAGEMENT ASIA (HVBAM) • CDO in Subprime Mortgage Crisis Introduction to Collateralized Debt Obligations (CDOs) A CDO is an asset-backed security whose underlying collateral is typically a portfolio of bonds (corporate or sovereign) or bank loans. A CDO cash-flow structure allocates interest income and principal repayments from a collateral pool
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(stock)‚ debt (loans)‚ or hybrid securities. A company’s capital structure is then the composition or ’structure’ of its risks and liabilities. The company’s ratio of debt to total financing is referred to as its leverage. Collateralized Debt Obligation (CDO) CDOs are a type of structured asset-backed security whose value and payments are derived from a portfolio of fixed-income underlying assets. CDOs are split into different risk classes‚ or tranches‚ whereby "senior" tranches are considered
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06/12/2012 FICO and Rating Agencies Current Issues in Business by Jeen Filz FICO 3 How does FICO work? 3 Criticism 4 rating agencies 6 history 6 Quick reminder of the financial crisis 7 Role of the rating agencies 8 Their impact 10 Perspectives 11 FICO How does FICO work? FICO is a public company that was found in the year 1956 with the aim to help financial services companies by measuring credit risk in a score which is called the FICO score. This stands for
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Title How is one to determine one’s moral obligation? What is one ought to do in a given situation and how exactly should we go about calculating and determining which actions we should do? The first principle that we will examine is the Simple Principle‚ which is a principle that says‚ of the available actions‚ one should do the action that will produce the best outcome. Liam B. Murphy in “The Demands of Beneficence” argue that the Simple Principle‚ requires too much from a person especially
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Draft- Confidential Khan‚ Iliasu‚ Chowdhry 1 Preventing Residential Mortgage Crises: An Islamic Finance Perspective By Waleed Khan a ‚ Dr. Fatimah B. M. Iliasu b & Sajjad Chowdhry c Abstract The 2008 Financial Crisis has compelled the international financial industry‚ politicians and homeowners to search their souls for the root causes of the problem. Many point to insufficient regulatory supervision‚ others to a culture addicted to credit and sheer greed. While these issues certainly exist‚ we
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Term paper TD Bank-Collateral Mortgage Course: BUSI2601D Instructor: J.L. Levasseur CUID: 100857079 Name: Daxia Shao Due Date: April 10th‚ 2013 Table of Content: Business Law term paper. ·Introduction 1.1 Objectives----------------------------------------------------------------------------- ------------------------------------------------------------------------------------------p1 1.2 Methodology-------------------------
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