Securitisation: It’s back | The Economist:
"GIVEN their role in the 2008 meltdown, and their subsequent branding as toxic sludge, it is not surprising that “securitised” financial products have had a quiet few years. Yet the transformation of mortgages, credit-card debt and other recurring cashflows into new marketable securities is enjoying something of a resurgence. Once apparently destined for the financial history books, the alphabet soup of ABSs (asset-backed securities), MBSs (their mortgage version), CLOs (collateralised loan obligations) and others had a bumper year in 2013. More growth is expected this year (see article).
Not everybody is thrilled. Some observers argue that the risks securitisation poses are too grave. But its revival should be welcomed, for it is probably essential to continued economic recovery, particularly in Europe."
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