This is a market driven by fear. In mid 2007 the banking crisis began with subprime mortgages given to people who could hardly afford them, and used as raw material for securitizations. The system put in place by the banks was revealed to be complex, expanding all the way from massive usage of collateralized debt obligations (CDOs) to off-balance-sheet conduits and special investment vehicles (SIVs) which served for regulatory arbitrage.
KeywordsCredit Default Swap International Financial Reporting Standard Banking Crisis Financial Service Authority Credit Derivative
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