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Securitisation & the Global Financial Crisis of 2007/8 financial crisis



This video explains what securitisation is and how it contributed to the financial crisis of 2007-08 .

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Securitisation & the Global Financial Crisis of 2007/8

Securitisation & the Global Financial Crisis of 2007/8

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Securitisation & the Global Financial Crisis of 2007/8
financial crisis
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35 thoughts on “Securitisation & the Global Financial Crisis of 2007/8 financial crisis”

  1. If you work in finance or know enough about banking, can someone answer this question?

    Where can i learn about how the process of structured finance works regarding the details of buying and selling, and all of the things that are done in conjunction with buying and selling structured finance securities?

    Im aware that financial institutions trade the writes to collect other peoples debt in exchange for quick cash, after these debts are bundled up and often attached with a stock option to hedge potential defaults, and this is generally done in the risk department of corporate entities, between various banks, venture capital firms, pension funds, IBs, etc.

    But I want to interview someone who worked in the industry before so i can understand more the exact routine and process, and what goes into selection, and how business partners are chosen etc.

  2. Only thing is, from research, banks do not lend their own capital from 'deposits' for mortgages. They create credit from the borrowers signature (bond) and enter as an asset and a liability. Reserves at the central bank aren't affected. The fractional reserve theory from the 1920s and 30s has been debunked as has the 'intermediates' theory from the 60s.

  3. Actually the stock market crash stabilized shortly after 1929. it was when the dustbowl swept through the midwest most of the loans on small town banks defaulted, banks failed, contagion ensued and lending dried up, economy crashed, unemployment took off. but otherwise great securization explanation, thank you!

  4. Great video, there is just one little simplification that I usually find among videos related to the subprime mortgage crisis and is that the Tranches are not separated by its risk or probability of payment, they are mostly separated by maturity of the debt on the underlying asset. This is related to risk because debt with longer maturities often have greater level of sensibility to changes in their fundamentals which would mean that under any change their prices will vary in greater proportion than the shorter maturity debt. Just wanted to put my grain of sand, keep at it. Great job

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