FINANCIALINDUSTRYSTRUCTURE.pptVIP

* * * * * * * * * * * * * CEIC Data no longer available * Credit performance worse at sub-prime lenders. Mortgage losses estimated at $1.4 trilion by IMF Liquidity of CMO’s and CDO’s There is much uncertainty and asymmetric info in CMO’s. Difficult for a potential investor to evaluate quality of the mortgage loan bundle while bundler/seller may have better idea. Increased risk has generated lemon’s problem. Wide bid/ask spreads makes it difficult to reasonably implement M2M accounting. Issues Capitalization: Banks and other holders of mortgage backed securities are likely to take large losses