Stearns), two financial conglomerates (Citigroup, JPMorgan Chase), three securitized insurance companies (AIG,MBIA, AMBAC) and the three rating agencies (Moody’s, Standard & Poors, Fitch). Investment banks bundled mortgages with other loans and debts into collateralized debt obligations (CDOs), which they sold to investors. Rating agencies gave many CDOs AAA ratings. Subprime loans led to predatory lending. Many home owners were given loans they could never repay. Part II: The Bubble (2001–2007)
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9-104-060 REV: MARCH 28, 2005 DAVID F. HAWKINS Bond Ratings 1 The two major bond-rating services are Moody’s Investors Service, Inc., and Standard & Poor’s Corporation. These two companies rate public and private corporate bond issues, commercial paper, preferred stock, and some large debt offerings of foreign companies and governments. Other rating agencies are Duff and Phelps, and Fitch’s. The information provided by the rating agencies is one of the factors that the marketplace uses to
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Reading Material - AFM Project A Project is a set of inter related activities leading to a complete tangible or intangible product or service. e.g construction of a building / dam / ship, launching of a new product, conducting national elections, state level professional admission process, setting up a new plant A project in business refers to an organized program of activity carried out to meet a definite goal. In business it may be to launch a new product, set up a new plant, increase
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tranches to suit specific needs of individual and institutional customers. This multiple class or tranche structure is known as the Collateralized Debt Obligation (CDO) structure. CDO structure is a way of redistributing the prepayment risk and credit risk. Rating
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Corp. (AIGFP), which is the business that wrote the credit default swaps that were a significant source of AIG’s liquidity issues in 2008. AIGFP reduced the notional amount of its derivative portfolio by 46 percent from $940.7 billion at December 31, 2009, to $505.8 billion at September 30, 2010. AIG has also reduced its exposure to its Securities Lending program, as described below. Securities Lending Solution: Maiden Lane II Multi-Sector Credit Default Swap Solution: Maiden Lane III Chronology
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The Mortgage and Financial Crises: The Role of Credit Risk Management and Corporate Governance William W. Lang Federal Reserve Bank of Philadelphia Ten Independence Mall, Philadelphia, PA 19106 Phone: 215-574-7225 E-mail: William.Lang@phil.frb.org Julapa Jagtiani Federal Reserve Bank of Philadelphia Ten Independence Mall, Philadelphia, PA 19106 Phone: 215-574-7284 E-mail: Julapa.Jagtiani@phil.frb.org February 9, 2010 Abstract This paper discusses the role of risk management and corporate
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risk but on reinvestment risk as well. When interest rate decrease, it is more difficult to reinvest coupon at a higher rate; they are stuck with low interest rates. Additionally, another factor would be the Bond ratings. Bond ratings are credit ratings provided by rating agency to determine the default risk of the bond; default happens
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ADMAP REVIEW OF THE MOVIE – INSIDE JOB Rohan Rambhia | PGP-10-155 Inside Job is an exemplary recount of how administrator’s role when exploited to form risky administrative strategies by means of faulty processes lead to a crisis of the stature of the recession of 2008. It is a comprehensive documentary which narrates the history of the collapse, not only going into great, informative depth about the risk-based strategies that put the global economy on the line, but looks back to the rise
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Treasury management (or treasury operations) includes management of an enterprise's holdings, with the ultimate goal of maximizing the firm's liquidity and mitigating its operational, financial and reputational risk. Treasury Management includes a firm's collections, disbursements, concentration, investment and funding activities. In larger firms, it may also include trading in bonds, currencies, financial derivatives and the associated financial risk management. Most banks have whole departments devoted
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INSIDE JOB—A documentary Business, Ethics and Governance 18 September 2011 Submitted by: Suzanne M. Chevalier Inside Job is a documentary written and directed by Charles Ferguson, and narrated by Matt Damon. The film chronicles the economic collapse of 2008 and the events which led up to it. The film is divided into five parts; 1) How We Got Here, 2) The Bubble, 3) The Crisis, 4) Accountability, and 5) Where We Are Now. The parts of the film come together to uncover the corruption
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