abhishreshthaa
Abhijeet S
10 reasons as to why the Titanic was actually a securitisation instrument
1) The downside was not immediately apparent.
2) It went underwater rapidly despite assurances it was unsinkable.
3) Only a few wealthy people got out in time.
4) The structure appeared iron-clad.
5) Nobody really understood the risk.
6) The disaster happened overnight London time.
7) Nobody spent any time monitoring the risk.
8) People spent a lot trying to lift it out of the water.
9) People who actually made money were not in original deal.
10) Despite the disaster, people still went on other ships.
The above highlights the risks inherent in securitisation. One of the biggest inherent threats in securitisation deals is that the market participants have necessarily believed securitised instruments to be safe, while in reality, many of them represent poor credit risks or doubtful receivables.
For example, a growing section of securitisation market is sub-prime auto loans and home equity loans. Similarly, many of the health-care receivables or student loan receivables may not represent good credits
1) The downside was not immediately apparent.
2) It went underwater rapidly despite assurances it was unsinkable.
3) Only a few wealthy people got out in time.
4) The structure appeared iron-clad.
5) Nobody really understood the risk.
6) The disaster happened overnight London time.
7) Nobody spent any time monitoring the risk.
8) People spent a lot trying to lift it out of the water.
9) People who actually made money were not in original deal.
10) Despite the disaster, people still went on other ships.
The above highlights the risks inherent in securitisation. One of the biggest inherent threats in securitisation deals is that the market participants have necessarily believed securitised instruments to be safe, while in reality, many of them represent poor credit risks or doubtful receivables.
For example, a growing section of securitisation market is sub-prime auto loans and home equity loans. Similarly, many of the health-care receivables or student loan receivables may not represent good credits