Microsoft Word - 09-060 The_Economics_of_Structured_Finance_FINAL.docx - 09-060.pdf thumbnail
Microsoft Word - 09-060 The_Economics_of_Structured_Finance_FINAL.docx - 09-060.pdf
www.hbs.edu
securities produced by structured finance activities have far less chance of surviving a severe economic downturn than traditional corporate securities of equal 3 rating ooling of economic assets (e.g. loans, bonds, mortgages) and subsequent issuance of a prioritized capital structure of claims, kno
2 Users
0 Comments
5 Highlights
0 Notes

Top Highlights

  • securities produced by structured finance activities have far less chance of surviving a severe economic downturn than traditional corporate securities of equal 3 rating
  • ooling of economic assets (e.g. loans, bonds, mortgages) and subsequent issuance of a prioritized capital structure of claims, known as tranches, against these collateral pools.
  • A second, equally neglected feature of the securitization process is that it substitutes risks that are largely diversifiable for risks that are highly systematic
  • modest imprecision in the parameter estimates can lead to variation in the default risk of the structured finance securities which is sufficien

Ready to highlight and find good content?

Glasp is a social web highlighter that people can highlight and organize quotes and thoughts from the web, and access other like-minded people’s learning.