CDOs
Structured debt products
CDOs, or collateralized debt obligations, are complex financial instruments that bundle various loans or debt assets into packages that can be sold to investors.
They gained notoriety during the 2008 financial crisis, when CDOs containing risky subprime mortgages collapsed in value, triggering widespread bank failures.
The structure allows risk to be sliced into tranches with different levels of exposure, theoretically spreading risk but in practice often obscuring it.
The bank's CDOs were rated AAA until the housing market crashed.
Backed by pledged assets
- debtMoney owed another
- obligationRequired task or commitment
- mortgageSecured home loan
- securitiesTradeable financial assets
tranches · subprime · structured · derivatives · bonds · credit · default · swaps
collateralized
Backed by pledged assets
- debtMoney owed another
- obligationRequired task or commitment
- mortgageSecured home loan
securities · tranches · subprime · structured · derivatives · bonds · credit · default · swaps · ratings
chief
Top-ranking leader
- C-suiteTop executive positions
- leadershipAbility to direct others
- officerAuthority figure in uniform
digital · data · diversity · executive · corporate · title · position · role · management · strategy
- housing crisishousing bubble, housing crash, subprime mortgages, foreclosures, subprime loans
- debt instrumentsjunk bonds, corporate bonds, unsecured debt, bank debt, term loans
- financial institutionsbanks, central bank, commercial banks, investment bank, investment banks
- Financial ScandalsEnron, Bernie Madoff, Ponzi scheme, insider trading, securities fraud
- fixed incomebonds, treasuries, T-bills, CDs, treasury bonds
- risk managementrisk sharing, risk analysis, risk factor, risk mitigation, risk appetite
CDOscash
Ready spending funds
savings bonds · savings accounts · certificates of deposit · money market funds · municipal bonds