From time to time, it makes sense to remember the story of the 2008 Global Financial Crisis. While the current pandemic-led crisis is nothing like the 2008 one, effects of the latter keep popping up in “daily business” from time to time. The story approximately went like this - interest rates were low. Rising levels of securitisation meant bankers who “originated” loans didn’t care all that much about the ability of the borrowers to repay. Securitisation also meant that bankers and other financial industry people could make “side bets” on the loans. Financial innovation in this period resulted in the proverbial “alphabet soup” - CDO, CLO, MBS, ABS, and so on and so forth.
JLR says Tata to profits, yet again
JLR says Tata to profits, yet again
JLR says Tata to profits, yet again
From time to time, it makes sense to remember the story of the 2008 Global Financial Crisis. While the current pandemic-led crisis is nothing like the 2008 one, effects of the latter keep popping up in “daily business” from time to time. The story approximately went like this - interest rates were low. Rising levels of securitisation meant bankers who “originated” loans didn’t care all that much about the ability of the borrowers to repay. Securitisation also meant that bankers and other financial industry people could make “side bets” on the loans. Financial innovation in this period resulted in the proverbial “alphabet soup” - CDO, CLO, MBS, ABS, and so on and so forth.