collateralized debt is also know as

Collateralized debt is also know as 5 ons unsecured debt secured debt. The Federal Reserve Board. Trust in rating agencies.

Retrieved 13 July cite.citation{font-style:inherit}.mw-parser-output .citation q{quotes:"\"""\"""'""'"}.mw-parser-output .id-lock-free a,.mw-parser-output .citation .cs1-lock-free a{background:linear-gradient(transparent,transparent),url("//")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-limited a,.mw-parser-output .id-lock-registration a,.mw-parser-output .citation .cs1-lock-limited a,.mw-parser-output .citation .cs1-lock-registration a{background:linear-gradient(transparent,transparent),url("//")right 0.1em center/9px no-repeat}.mw-parser-output .id-lock-subscription a,.mw-parser-output .citation .cs1-lock-subscription a{background:linear-gradient(transparent,transparent),url("//")right 0.1em center/9px no-repeat}.mw-parser-output .cs1-subscription,.mw-parser-output .cs1-registration{color:#555}.mw-parser-output .cs1-subscription span,.mw-parser-output .cs1-registration span{border-bottom:1px dotted;cursor:help}.mw-parser-output .cs1-ws-icon a{background:linear-gradient(transparent,transparent),url("//")right 0.1em center/12px no-repeat}.mw-parser-output code.cs1-code{color:inherit;background:inherit;border:none;padding:inherit}.mw-parser-output .cs1-hidden-error{display:none;font-size:100%}.mw-parser-output .cs1-visible-error{font-size:100%}.mw-parser-output .cs1-maint{display:none;color:#33aa33;margin-left:0.3em}.mw-parser-output .cs1-subscription,.mw-parser-output .cs1-registration,.mw-parser-output .cs1-format{font-size:95%}.mw-parser-output .cs1-kern-left,.mw-parser-output .cs1-kern-wl-left{padding-left:0.2em}.mw-parser-output .cs1-kern-right,.mw-parser-output .cs1-kern-wl-right{padding-right:0.2em}.mw-parser-output .citation .mw-selflink{font-weight:inherit}. Investors—buyers of CDO—include insurance companies, mutual fund companies, unit trusts, investment trusts, commercial banks, investment banks, pension fund managers, private banking organizations, other CDOs and structured investment vehicles. [16], In 1974, the Equal Credit Opportunity Act in the United States imposed heavy sanctions for financial institutions found guilty of discrimination on the basis of race, color, religion, national origin, sex, marital status, or age[17] This led to a more open policy of giving loans (sometimes subprime) by banks, guaranteed in most cases by Fannie Mae and Freddie Mac. [93] However, if the collateral had been sufficient, those ratings would have been correct, according to the FDIC. What Is a Collateralized Debt Obligation (CDO)? (See the Impaired Securities chart. A more accurate term would have been ratings laundering." Other factors explaining the popularity of CDOs include: In the summer of 2006, the Case–Shiller index of house prices peaked. The risk and return for a CDO investor depends both on how the tranches are defined, and on the underlying assets. The yield and weighted average life of the bonds or equity notes being issued is then calculated based on the modeling assumptions provided by the underwriter.

[24], An early indicator of the crisis came in July 2007 when rating agencies made unprecedented mass downgrades of mortgage-related securities[71] (by the end of 2008 91% of CDO securities were downgraded[72]), and two highly leveraged Bear Stearns hedge funds holding MBSs and CDOs collapsed. Originally developed as instruments for the corporate debt markets, after 2002 CDOs became vehicles for refinancing mortgage-backed securities (MBS).

Other times it is used for a particular type of that security—one backed by consumer loans.

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