Banks’ elderly administration didn’t comprehend the risks of the tools they authored
As to why is actually you to definitely extremely important? As then you might promote that it to help you a pension money otherwise so you’re able to lots of other individuals who could only pick An excellent-rated securities.
Honest Partnoy, Publisher, Contagious Avarice

A beneficial CDO was a great collateralized loans responsibility. It is fundamentally a combination of many different assets — this is the guarantee — which might be added to a depend on, otherwise a pals, following one business items bonds. Making it essentially a way of combo together some type of a financial investment which will make another investment. (more…)