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Recent Financial Crisis and the Structured Finance: Accounting Perspective for Future

  • Soner Gokten
  • Pınar Okan Gokten
Chapter
Part of the Contributions to Management Science book series (MANAGEMENT SC.)

Abstract

Structured finance techniques, especially synthetic structuring, were applied intensively to ensure sustainable growth of credit mechanism via developing high rated hybrid instruments before recent global shock. The system created a loop that caused systematic risk maximization derived from undesirable default correlation between collaterals. Therefore structured products were seen as the reason for financial crisis and their popularity has begun to fall. On the other side, discussions have started to take place within accounting dimension in recent years. The fundamental point of this perspective was constructed on the efficiency of accounting techniques to provide signals on future hitches and to make market participants properly informed about the values of collaterals. In this study, the tradeoff for applying fair value versus historical cost accounting is discussed in the frame of the connection between recent global shock and structured finance.

Keywords

Cash Flow Financial Crisis Credit Default Swap Default Probability Future Cash Flow 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer International Publishing AG 2017

Authors and Affiliations

  1. 1.Faculty of Economics and Administrative Sciences, Department of ManagementBaskent UniversityBaglicaTurkey
  2. 2.Faculty of Economics and Administrative Sciences, Department of International TradeGazi UniversityBesevlerTurkey

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