Description
This is a PPT about structured finance, mortgage based Securitization, who are the different players involved in securitization, different products in MBS.
Mortgage Backed Securitization (MBS)
Structured Finance What is it all about?
?
?
?
Traditionally, lending banks, capital markets and insurance markets operated as separate islands The integration of credit markets, capital markets and insurance markets has resulted in a explosion in financial innovation Structured Finance seeks to custom-tailor risk and reward at appropriate prices
MBS
?
?
?
MBS is one of the most widely used applications of structured finance Securitization aims at creating liquid debt securities from illiquid debt on the books of banks and credit institutions A person can hold a fraction of the debt representing a fraction of someone else’s home loan
Traditional Lending
?
Liabilities
?
Assets Home Loan Advances (Future Receivables)
?
Securitization
?
Liabilities
?
Assets Cash on Sale of Home Loan Advances (Future Receivables)
?
Players
?
?
? ? ? ? ?
Obligor Originator SPV Investment Banker Credit Rating Agency Credit Insurer Investor
Products
?
Pass Through Certificates (PTC) Collateralized Debt Obligations (CDO) - Cash Flow and Synthetic CDO Credit Default Swaps (CDS)
? ?
?
Case Studies What went wrong?
?
?
?
?
Savings & Home Loan Crisis Fannie Mae, Freddie Mac Citigroup, Merrill Lynch, Bear Sterns, Lehman Bros AIG
Originate-to-distribute
?
?
? ? ?
Moral Hazard Adverse Selection Asymmetric Information CIBIL/FICO Corporate Governance – a fresh perspective
Real Estate Asset Bubbles
?
?
? ? ? ?
USA Europe South East Asia Japan China India?
MBS: Villain or Victim?
Thank You
doc_929896523.ppt
This is a PPT about structured finance, mortgage based Securitization, who are the different players involved in securitization, different products in MBS.
Mortgage Backed Securitization (MBS)
Structured Finance What is it all about?
?
?
?
Traditionally, lending banks, capital markets and insurance markets operated as separate islands The integration of credit markets, capital markets and insurance markets has resulted in a explosion in financial innovation Structured Finance seeks to custom-tailor risk and reward at appropriate prices
MBS
?
?
?
MBS is one of the most widely used applications of structured finance Securitization aims at creating liquid debt securities from illiquid debt on the books of banks and credit institutions A person can hold a fraction of the debt representing a fraction of someone else’s home loan
Traditional Lending
?
Liabilities
?
Assets Home Loan Advances (Future Receivables)
?
Securitization
?
Liabilities
?
Assets Cash on Sale of Home Loan Advances (Future Receivables)
?
Players
?
?
? ? ? ? ?
Obligor Originator SPV Investment Banker Credit Rating Agency Credit Insurer Investor
Products
?
Pass Through Certificates (PTC) Collateralized Debt Obligations (CDO) - Cash Flow and Synthetic CDO Credit Default Swaps (CDS)
? ?
?
Case Studies What went wrong?
?
?
?
?
Savings & Home Loan Crisis Fannie Mae, Freddie Mac Citigroup, Merrill Lynch, Bear Sterns, Lehman Bros AIG
Originate-to-distribute
?
?
? ? ?
Moral Hazard Adverse Selection Asymmetric Information CIBIL/FICO Corporate Governance – a fresh perspective
Real Estate Asset Bubbles
?
?
? ? ? ?
USA Europe South East Asia Japan China India?
MBS: Villain or Victim?
Thank You
doc_929896523.ppt