MBIA's strategy for insuring CDOs involves a rigorous four part underwriting process: 1) Evaluating proposed collateral pools, 2) Evaluating collateral managers through due diligence for managed CDOs, 3) Undertaking cash flow and quantitative modeling, and 4) Evaluating legal structures. MBIA focuses on insuring the most senior risk layers of CDOs across various asset classes to take advantage of diversification and protect against correlated defaults. MBIA segments multi-sector CDOs into high grade and mezzanine categories based on underlying collateral ratings and typically insures at support levels well above triple-A requirements.
This document provides an overview of Morgan Stearns Corporation, a structured finance development group. It was founded to take advantage of changes in emerging markets and provide strategic partnerships to explore business opportunities. Morgan Stearns aims to build solid foundations through securitization and accessing capital markets. It follows three strategic values and has a three-step interface approach to strategic planning, diversified marketing, and managing results for clients. Morgan Stearns specializes in structured finance, securitization, and accessing private capital markets. It works with strategic partners to offer diversified services in alternative investments.
This letter responds to the SEC's proposal regarding open-end fund liquidity risk management programs and swing pricing. BlackRock supports the SEC's focus on promoting high standards for liquidity risk management across the fund industry. BlackRock outlines its internal liquidity risk management framework and provides the following comments on the SEC's proposal:
1. BlackRock agrees that funds should have liquidity risk management policies and procedures in place.
2. Enhanced disclosure of funds' liquidity risk management practices would benefit investors.
3. Classifying assets by "days to liquidate" is too subjective and unreliable for regulatory purposes. An alternative "liquidity tiering" approach should be used instead.
4.
This workshop aims to discuss risk mitigation techniques for Islamic financial institutions. It will provide an overview of conventional and Islamic approaches to risk management, and analyze the types of risks that Islamic banks face from their balance sheets. These include credit, market, and operational risks. The presentation will also explore dispute resolution and Shariah compliance as risk management techniques for the Islamic finance industry.
Financial risk management ppt @ mba financeBabasab Patil
This document provides an overview of financial risk management. It discusses key concepts such as risk, risk stratification, risk management approaches, interest rate risk, and term structure theories. The key points are:
1. Financial risk management involves monitoring risks and managing their impact on a firm. It uses modern finance theories to balance risk taken with expected reward.
2. Risk can be stratified into known probabilities, known parameters but uncertain quantification, unknown causation/interactions, and undiscovered or unmanifested risks.
3. A risk management approach involves identifying, measuring, and adjusting risks through behavior changes, insurance, hedging, and other means. Managing core business risks internally and hedging economic risks
Liquidity risk.in islamic vs conventional banksirum_iiui
Liquidity risk arises when a bank is unable to meet its short-term obligations due to difficulties obtaining cash at a reasonable cost or selling assets. It can cause insolvency even for technically solvent institutions. Liquidity risk for banks results from an impaired ability to match the maturities of assets and liabilities, creating either a surplus of cash that must be invested or a shortage that must be funded. For Islamic banks, liquidity risk is critical as they cannot borrow funds to meet liquidity requirements and assets are typically less liquid than conventional bank assets.
ISFIRE Risk Management for IFIs - Nov 2014Mujtaba Khalid
Risk management has been a major focus in Islamic banking since the establishment of the IFSB in 2002. This article summarizes the risk management guidelines issued by the State Bank of Pakistan, which are based on IFSB principles. It focuses on operational risk management and the different types of risks faced by Islamic banks, including equity investment, credit, liquidity, and market risk. The author examines how Islamic banks should implement comprehensive risk identification, measurement, monitoring, and mitigation processes to manage risks in accordance with Sharia principles and protect the interests of depositors and stakeholders.
Managed accounts provide investors with control over their hedge fund investments through segregated accounts structured by the investor but managed by the fund manager. This offers transparency, control over assets to prevent gating or side-pocketing, and ensures compliance with the investor's risk limits. Managed accounts also allow for effective counterparty risk management and consistent valuation methodology across the portfolio. For investors, options for managed accounts include proprietary customized accounts, investing through a fund of managed accounts using third party accounts on a single platform, or using multiple platforms.
1) The document discusses banking and risk management in India, defining banking as accepting deposits from the public and conducting related financial services. It outlines the key functions of banks.
2) It defines risk management and the four main types of risks faced by banks: market, operational, country, and credit risk.
3) The document discusses various tools and techniques used by banks to manage credit risk and mitigate different types of risks. This includes risk-based supervision, credit risk mitigation techniques, and managing risks like concentration, liquidity, reputation, and strategic risks.
This document provides an overview of Morgan Stearns Corporation, a structured finance development group. It was founded to take advantage of changes in emerging markets and provide strategic partnerships to explore business opportunities. Morgan Stearns aims to build solid foundations through securitization and accessing capital markets. It follows three strategic values and has a three-step interface approach to strategic planning, diversified marketing, and managing results for clients. Morgan Stearns specializes in structured finance, securitization, and accessing private capital markets. It works with strategic partners to offer diversified services in alternative investments.
This letter responds to the SEC's proposal regarding open-end fund liquidity risk management programs and swing pricing. BlackRock supports the SEC's focus on promoting high standards for liquidity risk management across the fund industry. BlackRock outlines its internal liquidity risk management framework and provides the following comments on the SEC's proposal:
1. BlackRock agrees that funds should have liquidity risk management policies and procedures in place.
2. Enhanced disclosure of funds' liquidity risk management practices would benefit investors.
3. Classifying assets by "days to liquidate" is too subjective and unreliable for regulatory purposes. An alternative "liquidity tiering" approach should be used instead.
4.
This workshop aims to discuss risk mitigation techniques for Islamic financial institutions. It will provide an overview of conventional and Islamic approaches to risk management, and analyze the types of risks that Islamic banks face from their balance sheets. These include credit, market, and operational risks. The presentation will also explore dispute resolution and Shariah compliance as risk management techniques for the Islamic finance industry.
Financial risk management ppt @ mba financeBabasab Patil
This document provides an overview of financial risk management. It discusses key concepts such as risk, risk stratification, risk management approaches, interest rate risk, and term structure theories. The key points are:
1. Financial risk management involves monitoring risks and managing their impact on a firm. It uses modern finance theories to balance risk taken with expected reward.
2. Risk can be stratified into known probabilities, known parameters but uncertain quantification, unknown causation/interactions, and undiscovered or unmanifested risks.
3. A risk management approach involves identifying, measuring, and adjusting risks through behavior changes, insurance, hedging, and other means. Managing core business risks internally and hedging economic risks
Liquidity risk.in islamic vs conventional banksirum_iiui
Liquidity risk arises when a bank is unable to meet its short-term obligations due to difficulties obtaining cash at a reasonable cost or selling assets. It can cause insolvency even for technically solvent institutions. Liquidity risk for banks results from an impaired ability to match the maturities of assets and liabilities, creating either a surplus of cash that must be invested or a shortage that must be funded. For Islamic banks, liquidity risk is critical as they cannot borrow funds to meet liquidity requirements and assets are typically less liquid than conventional bank assets.
ISFIRE Risk Management for IFIs - Nov 2014Mujtaba Khalid
Risk management has been a major focus in Islamic banking since the establishment of the IFSB in 2002. This article summarizes the risk management guidelines issued by the State Bank of Pakistan, which are based on IFSB principles. It focuses on operational risk management and the different types of risks faced by Islamic banks, including equity investment, credit, liquidity, and market risk. The author examines how Islamic banks should implement comprehensive risk identification, measurement, monitoring, and mitigation processes to manage risks in accordance with Sharia principles and protect the interests of depositors and stakeholders.
Managed accounts provide investors with control over their hedge fund investments through segregated accounts structured by the investor but managed by the fund manager. This offers transparency, control over assets to prevent gating or side-pocketing, and ensures compliance with the investor's risk limits. Managed accounts also allow for effective counterparty risk management and consistent valuation methodology across the portfolio. For investors, options for managed accounts include proprietary customized accounts, investing through a fund of managed accounts using third party accounts on a single platform, or using multiple platforms.
1) The document discusses banking and risk management in India, defining banking as accepting deposits from the public and conducting related financial services. It outlines the key functions of banks.
2) It defines risk management and the four main types of risks faced by banks: market, operational, country, and credit risk.
3) The document discusses various tools and techniques used by banks to manage credit risk and mitigate different types of risks. This includes risk-based supervision, credit risk mitigation techniques, and managing risks like concentration, liquidity, reputation, and strategic risks.
1) Banking in India is defined by the Banking Regulation Act of 1949 as accepting deposits from the public that are repayable on demand and using those deposits to lend money or make investments.
2) The major risks for banks include credit risk, market risk, operational risk, country risk, and risks arising from changes in strategies or the business environment.
3) Risk management techniques used by banks include collateral, credit ratings, exposure limits, guarantees, and mitigating concentration, liquidity, reputation, interest rate, and strategic risks.
This document discusses rate of return risk in Islamic finance. It defines rate of return risk as the potential impact of changes in market rates of return on an Islamic bank's net income or equity value. Rate of return risk exists for Islamic banks because they use conventional interest rates as benchmarks, exposing them mismatch risk between asset and liability rates. The document outlines various techniques Islamic banks can use to manage this risk, such as diversifying assets, securitization, and off-balance sheet hedging methods. Managing rate of return risk is important for Islamic bank profitability and competitiveness.
Banks face various risks through their business activities of mobilizing and deploying funds. This document discusses the key risks faced by banks under three categories - risks to the banking book, risks to the trading book, and off-balance sheet exposures. It identifies the major risks as liquidity risk, interest rate risk, credit risk, market risk, and operational risk. Each risk is further broken down into more specific sub-risks. The risks arise from a bank's loans, deposits, investments, trading activities, and other transactions and have the potential to result in losses for the bank. Effective risk management involves identifying, measuring, controlling and monitoring these risks.
Assessing a bank’s culture is not an easy task, but there clearly is an increased emphasis on culture that is part of the regulators' broader focus on “heightened standards.” Learn what it takes to have a strong credit culture. Read about these 10 credit culture factors to assess your institution's credit culture.
This document analyzes whether Islamic banks hold more regulatory capital than conventional banks. It finds that Islamic finance instruments are riskier due to credit, market, liquidity and other risks. Modes of finance like murabahah, salam, istisna'a, ijarah, musharakah and mudharabah each carry unique risks requiring high capital charges. Therefore, the document concludes that Islamic banks will generally need to hold more regulatory capital than conventional banks to account for the higher risks in their activities and instruments.
Heading into 2020, The Risk Management Association is focusing on eight risks. Learn about the top risks the financial services industry faces and how you can address them.
This document is a self-study guide for understanding basic banking operations and risks. It begins by explaining the goals of banks are to generate profits while managing risks. It then provides overviews of the routine transaction flows in banks, how the central pool of funds is managed, and the various risks banks face, including credit, market, interest rate, liquidity, operational, legal, and reputation risks. The guide is intended to help non-banking staff gain a foundational understanding of banking.
Quantifi Whitepaper: The Evolution Of Counterparty Credit Riskamoini
This white paper explores the evolution of approaches to counterparty credit risk management in major banks over the past two decades. It traces how models have progressed from simple reserve-based approaches to active simulation and hedging of counterparty exposures. Recent priorities include incorporating wrong-way risk, collateral risks, and clearing more products through central counterparties to reduce capital charges under Basel III. Overall banks have converged on actively managing counterparty risk through central simulation and hedging functions.
The document discusses risk management in Islamic banking. It outlines the conceptual framework, including the unique risks associated with Islamic modes of finance like murabahah, ijara, salam and mudharabah. These modes can bundle credit risk with market risk. The document also covers the sources of risk for Islamic banks, including financial, business and operational risks. It emphasizes that risk management is important for Islamic banks to maintain stability and depositors' confidence.
Safeguard your lending program by learning about the 8 steps of credit risk management. Learn about nonfinancial risks, structuring the loan, and more.
This document discusses risk management in Islamic banking and proposes a conceptual framework. It is comprised of three parts. Part 1 discusses the systemic framework of an Islamic bank's balance sheet, including its various risks and soundness considerations. Part 2 deals with the unique risks associated with Islamic financing modes and how the industry perceives these risks. Part 3 explores developing an internal risk rating system for Islamic financing modes to better capture their unique risk profiles. The document argues that internal risk rating systems can enhance risk management practices in Islamic banks.
The document discusses asset liability management (ALM) in banking. It covers several key topics in 3 paragraphs:
1) ALM refers to managing a bank's balance sheet to allow for different interest rate and liquidity scenarios. This involves assessing risks from changes in interest rates, exchange rates, and liquidity. ALM aims to quantify these risks and provide strategies to make credit, interest, and liquidity risks acceptable.
2) Common ALM techniques include gap analysis, duration analysis, scenario analysis, simulation, and value-at-risk to measure risks. Interest rate risk is a major focus, and tools like gap and duration analysis examine how changes in rates impact profits and asset values.
3)
The document discusses various aspects of risk management and capital requirements under Basel II. It provides explanations of key concepts such as economic capital, regulatory capital, credit risk measurement approaches, operational risk approaches, and credit risk mitigation techniques. It also compares the standardized and internal ratings-based approaches for credit risk and provides examples of calculating risk-weighted assets and capital adequacy ratios.
Alm in banks by Prabin kumar Parida, MFC, Utkal UniversityPrabin Kumar Parida
The document provides an overview of State Bank of India (SBI), the largest bank in India. It discusses SBI's history, operations, subsidiaries, international presence, management team, vision, mission and values. Some key points:
- SBI is India's largest bank with over 16,000 branches and assets of $388 billion as of 2013.
- It has domestic operations across India as well as an international presence with over 180 overseas offices.
- SBI has five associate banks and several non-banking subsidiaries that provide services like insurance, cards, and investment banking.
- The document outlines SBI's management structure and leadership team.
The document discusses establishing appropriate credit limits for customers. It recommends considering qualitative factors like a customer's character, capacity to pay, and capital, as well as quantitative factors from financial statements. A sample credit limit policy is provided that establishes criteria like granting 10% of a customer's tangible net worth as the base limit and adjusting up or down based on additional factors like security, payment history, and financial ratios. The policy outlines obtaining annual financial statements and reviewing accounts regularly.
It is important to consider the emerging risks surrounding commercial lending and commercial real estate lending. What stage are we in of this current economic cycle? The answer is uncertain, but it is important to consider the emerging risks surrounding commercial lending and CRE lending.
How has the risk manager evolved to meet the needs of the banking industry? This slide deck takes a look at how the position has evolved and what skills should you anticipate needing in the future to compose the skill profile of the next decade’s agile risk manager.
This document discusses managing bank risk for a university. It provides an overview of the various types of risks faced from bank partners, including credit risk, liquidity risk, operational risk, and counterparty risk. It then outlines steps a university treasury department can take to manage this risk, such as adopting an enterprise risk management approach, identifying specific risk exposures, evaluating and scoring risks, developing risk responses, and ongoing risk monitoring through tools like a bank risk matrix. The goal is to help the university diversify risk across multiple bank partners and instruments while balancing credit quality, cost, and institutional exposure.
Today bankers and other financial service managers have learned to look at their asset and liability portfolios as an integrated whole. This type of coordinated and integrated decision making is known today as asset-liability management (ALM). This thesis is prepared on ‘The Hong Kong and Shanghai Banking Corporation’- HSBC, in Bangladesh. With its symbol of a Hexagon and the illustrative theme ‘The world’s local bank’ –HSBC is known to a lot of countries and territories of the world as a leading financial service institution. Although the history of its operation in our country is relatively new, yet HSBC already commands a great deal of respect and reputation in our banking community.
Every Financial Institute irrespective of its size is generally exposed to market liquidity and interest rate risks in connection with the process of Asset Liability Management. Failure to identify the risks associated with business and failure to take timely measures in giving a sense of direction threatens the very existence of the institution. It is, therefore, important that the strategic decision makers of an organization assume special care with regard to the Balance Sheet Risk management and should ensure that the structure of the institute’s business and the level of Balance Sheet risk it assumes are effectively managed, appropriate policies and procedures are established to control the direction of the organization. The whole exercise is with the objective of limiting these risks against the resources that are available for evaluating and controlling liquidity and interest rate risk.
Sound Credit Risk Experience Sharing Vietnam Fsa And BankEric Kuo
The document discusses credit risk management and can be grouped into 3 important parts: credit rating, underwriting, and management. It provides examples of rating models that focus on different business segments and discusses factors to consider in building an internal rating system, emphasizing the importance of data. It also covers credit risk measurement standards outlined in Basel II and the process of mapping internal ratings to external ratings.
Special Purpose Vehicles and Insolvency Reforms in Philipeansfinancedude
This document discusses special purpose vehicles (SPVs) and insolvency reforms in the Philippines. It provides background on the growth of non-performing loans (NPLs) in Philippine banks following the Asian Financial Crisis. It then evaluates the SPV Law passed in 2003 that aims to help banks address their bad debt problems by transferring NPLs to private asset management companies. However, it argues that insolvency reforms are also needed to improve the legal environment for SPVs. Existing bankruptcy procedures influence the prices SPVs offer for NPLs and banks' willingness to sell. The document examines recent insolvency court cases and proposed new corporate recovery laws that could impact SPV effectiveness if passed.
El autor presenta su blog "pajarosdesaparecidos.blogspot.com" donde comparte fotos de sus pájaros desaparecidos con la esperanza de encontrarlos o recibir información que ayude a hacer justicia. Invita a los lectores a visitar el blog o ponerse en contacto para compartir su dolor por la pérdida de sus mascotas.
1) Banking in India is defined by the Banking Regulation Act of 1949 as accepting deposits from the public that are repayable on demand and using those deposits to lend money or make investments.
2) The major risks for banks include credit risk, market risk, operational risk, country risk, and risks arising from changes in strategies or the business environment.
3) Risk management techniques used by banks include collateral, credit ratings, exposure limits, guarantees, and mitigating concentration, liquidity, reputation, interest rate, and strategic risks.
This document discusses rate of return risk in Islamic finance. It defines rate of return risk as the potential impact of changes in market rates of return on an Islamic bank's net income or equity value. Rate of return risk exists for Islamic banks because they use conventional interest rates as benchmarks, exposing them mismatch risk between asset and liability rates. The document outlines various techniques Islamic banks can use to manage this risk, such as diversifying assets, securitization, and off-balance sheet hedging methods. Managing rate of return risk is important for Islamic bank profitability and competitiveness.
Banks face various risks through their business activities of mobilizing and deploying funds. This document discusses the key risks faced by banks under three categories - risks to the banking book, risks to the trading book, and off-balance sheet exposures. It identifies the major risks as liquidity risk, interest rate risk, credit risk, market risk, and operational risk. Each risk is further broken down into more specific sub-risks. The risks arise from a bank's loans, deposits, investments, trading activities, and other transactions and have the potential to result in losses for the bank. Effective risk management involves identifying, measuring, controlling and monitoring these risks.
Assessing a bank’s culture is not an easy task, but there clearly is an increased emphasis on culture that is part of the regulators' broader focus on “heightened standards.” Learn what it takes to have a strong credit culture. Read about these 10 credit culture factors to assess your institution's credit culture.
This document analyzes whether Islamic banks hold more regulatory capital than conventional banks. It finds that Islamic finance instruments are riskier due to credit, market, liquidity and other risks. Modes of finance like murabahah, salam, istisna'a, ijarah, musharakah and mudharabah each carry unique risks requiring high capital charges. Therefore, the document concludes that Islamic banks will generally need to hold more regulatory capital than conventional banks to account for the higher risks in their activities and instruments.
Heading into 2020, The Risk Management Association is focusing on eight risks. Learn about the top risks the financial services industry faces and how you can address them.
This document is a self-study guide for understanding basic banking operations and risks. It begins by explaining the goals of banks are to generate profits while managing risks. It then provides overviews of the routine transaction flows in banks, how the central pool of funds is managed, and the various risks banks face, including credit, market, interest rate, liquidity, operational, legal, and reputation risks. The guide is intended to help non-banking staff gain a foundational understanding of banking.
Quantifi Whitepaper: The Evolution Of Counterparty Credit Riskamoini
This white paper explores the evolution of approaches to counterparty credit risk management in major banks over the past two decades. It traces how models have progressed from simple reserve-based approaches to active simulation and hedging of counterparty exposures. Recent priorities include incorporating wrong-way risk, collateral risks, and clearing more products through central counterparties to reduce capital charges under Basel III. Overall banks have converged on actively managing counterparty risk through central simulation and hedging functions.
The document discusses risk management in Islamic banking. It outlines the conceptual framework, including the unique risks associated with Islamic modes of finance like murabahah, ijara, salam and mudharabah. These modes can bundle credit risk with market risk. The document also covers the sources of risk for Islamic banks, including financial, business and operational risks. It emphasizes that risk management is important for Islamic banks to maintain stability and depositors' confidence.
Safeguard your lending program by learning about the 8 steps of credit risk management. Learn about nonfinancial risks, structuring the loan, and more.
This document discusses risk management in Islamic banking and proposes a conceptual framework. It is comprised of three parts. Part 1 discusses the systemic framework of an Islamic bank's balance sheet, including its various risks and soundness considerations. Part 2 deals with the unique risks associated with Islamic financing modes and how the industry perceives these risks. Part 3 explores developing an internal risk rating system for Islamic financing modes to better capture their unique risk profiles. The document argues that internal risk rating systems can enhance risk management practices in Islamic banks.
The document discusses asset liability management (ALM) in banking. It covers several key topics in 3 paragraphs:
1) ALM refers to managing a bank's balance sheet to allow for different interest rate and liquidity scenarios. This involves assessing risks from changes in interest rates, exchange rates, and liquidity. ALM aims to quantify these risks and provide strategies to make credit, interest, and liquidity risks acceptable.
2) Common ALM techniques include gap analysis, duration analysis, scenario analysis, simulation, and value-at-risk to measure risks. Interest rate risk is a major focus, and tools like gap and duration analysis examine how changes in rates impact profits and asset values.
3)
The document discusses various aspects of risk management and capital requirements under Basel II. It provides explanations of key concepts such as economic capital, regulatory capital, credit risk measurement approaches, operational risk approaches, and credit risk mitigation techniques. It also compares the standardized and internal ratings-based approaches for credit risk and provides examples of calculating risk-weighted assets and capital adequacy ratios.
Alm in banks by Prabin kumar Parida, MFC, Utkal UniversityPrabin Kumar Parida
The document provides an overview of State Bank of India (SBI), the largest bank in India. It discusses SBI's history, operations, subsidiaries, international presence, management team, vision, mission and values. Some key points:
- SBI is India's largest bank with over 16,000 branches and assets of $388 billion as of 2013.
- It has domestic operations across India as well as an international presence with over 180 overseas offices.
- SBI has five associate banks and several non-banking subsidiaries that provide services like insurance, cards, and investment banking.
- The document outlines SBI's management structure and leadership team.
The document discusses establishing appropriate credit limits for customers. It recommends considering qualitative factors like a customer's character, capacity to pay, and capital, as well as quantitative factors from financial statements. A sample credit limit policy is provided that establishes criteria like granting 10% of a customer's tangible net worth as the base limit and adjusting up or down based on additional factors like security, payment history, and financial ratios. The policy outlines obtaining annual financial statements and reviewing accounts regularly.
It is important to consider the emerging risks surrounding commercial lending and commercial real estate lending. What stage are we in of this current economic cycle? The answer is uncertain, but it is important to consider the emerging risks surrounding commercial lending and CRE lending.
How has the risk manager evolved to meet the needs of the banking industry? This slide deck takes a look at how the position has evolved and what skills should you anticipate needing in the future to compose the skill profile of the next decade’s agile risk manager.
This document discusses managing bank risk for a university. It provides an overview of the various types of risks faced from bank partners, including credit risk, liquidity risk, operational risk, and counterparty risk. It then outlines steps a university treasury department can take to manage this risk, such as adopting an enterprise risk management approach, identifying specific risk exposures, evaluating and scoring risks, developing risk responses, and ongoing risk monitoring through tools like a bank risk matrix. The goal is to help the university diversify risk across multiple bank partners and instruments while balancing credit quality, cost, and institutional exposure.
Today bankers and other financial service managers have learned to look at their asset and liability portfolios as an integrated whole. This type of coordinated and integrated decision making is known today as asset-liability management (ALM). This thesis is prepared on ‘The Hong Kong and Shanghai Banking Corporation’- HSBC, in Bangladesh. With its symbol of a Hexagon and the illustrative theme ‘The world’s local bank’ –HSBC is known to a lot of countries and territories of the world as a leading financial service institution. Although the history of its operation in our country is relatively new, yet HSBC already commands a great deal of respect and reputation in our banking community.
Every Financial Institute irrespective of its size is generally exposed to market liquidity and interest rate risks in connection with the process of Asset Liability Management. Failure to identify the risks associated with business and failure to take timely measures in giving a sense of direction threatens the very existence of the institution. It is, therefore, important that the strategic decision makers of an organization assume special care with regard to the Balance Sheet Risk management and should ensure that the structure of the institute’s business and the level of Balance Sheet risk it assumes are effectively managed, appropriate policies and procedures are established to control the direction of the organization. The whole exercise is with the objective of limiting these risks against the resources that are available for evaluating and controlling liquidity and interest rate risk.
Sound Credit Risk Experience Sharing Vietnam Fsa And BankEric Kuo
The document discusses credit risk management and can be grouped into 3 important parts: credit rating, underwriting, and management. It provides examples of rating models that focus on different business segments and discusses factors to consider in building an internal rating system, emphasizing the importance of data. It also covers credit risk measurement standards outlined in Basel II and the process of mapping internal ratings to external ratings.
Special Purpose Vehicles and Insolvency Reforms in Philipeansfinancedude
This document discusses special purpose vehicles (SPVs) and insolvency reforms in the Philippines. It provides background on the growth of non-performing loans (NPLs) in Philippine banks following the Asian Financial Crisis. It then evaluates the SPV Law passed in 2003 that aims to help banks address their bad debt problems by transferring NPLs to private asset management companies. However, it argues that insolvency reforms are also needed to improve the legal environment for SPVs. Existing bankruptcy procedures influence the prices SPVs offer for NPLs and banks' willingness to sell. The document examines recent insolvency court cases and proposed new corporate recovery laws that could impact SPV effectiveness if passed.
El autor presenta su blog "pajarosdesaparecidos.blogspot.com" donde comparte fotos de sus pájaros desaparecidos con la esperanza de encontrarlos o recibir información que ayude a hacer justicia. Invita a los lectores a visitar el blog o ponerse en contacto para compartir su dolor por la pérdida de sus mascotas.
The document discusses how The Simpsons and South Park are media texts that comment on media and the consumption of television. It analyzes Homer Simpson's description of television as "teacher, mother, secret lover" and how it combines apostrophe and tricolon. It also mentions how The Simpsons reviews rhetorical terms and explores the meaning of the word "rhetorical" between Homer and his son. Finally, it references a quote from South Park about not caring but still understanding.
Italian-Thai development publc company limitedfinancedude
The auditor is reporting on the consolidated financial statements of Italian-Thai Development PCL and its subsidiaries as of December 31, 2006. The auditor qualified their opinion due to the inability to audit the financial statements of one overseas subsidiary due to security concerns following a bomb blast. Additionally, the report draws attention to uncertainties regarding amounts recoverable from a debtor undergoing debt restructuring and contingent liabilities of a special purpose vehicle established to handle those debts. It also notes ongoing investigations into certain joint venture projects and an unapproved potash mining investment requiring government concession.
This document outlines regulations related to stamp duty land tax avoidance schemes in the UK. It prescribes certain arrangements related to non-residential property valued at £5 million or more that must be disclosed to tax authorities. The regulations define relevant terms, prescribe the arrangements, and outline an excluded arrangements schedule listing specific steps that do not require disclosure if used alone but would if combined in certain ways. It was made by the Treasury and came into force on August 1, 2005.
This document discusses asset securitization and the effect of insolvency on special purpose vehicles (SPVs) under US bankruptcy law. It explains that asset securitization involves transferring assets from an originator to an SPV, which then issues securities backed by the assets. This is done to isolate the assets from potential insolvency of the originator. The document outlines bankruptcy risks for lenders if assets are not securitized, and how securitization allows lower-cost financing. It also summarizes key bankruptcy concepts regarding SPVs, including that their bankruptcy remoteness relies on the legal concepts of true sale and substantive consolidation.
This document provides guidelines for special purpose vehicles (SPVs), securitization, and structured finance transactions for banks and other financial institutions in Zimbabwe. It outlines general requirements, disclosure requirements, separation requirements, and guidelines for purchasing and supplying assets. It also covers credit enhancement, liquidity facilities, treasury operations, and the securitization framework. Banks must obtain prior approval from the Reserve Bank to engage in these transactions and have appropriate policies, procedures, board oversight, and external auditing. Penalties are outlined for non-compliance with the guidelines.
Role of special purpose vehicles is ABS marketfinancedude
Special purpose vehicles (SPVs) play an important role in asset securitization. SPVs are legal entities that hold transferred assets in order to issue securities to investors backed by those assets. For the securitization to be effective, the transfer of assets from the sponsor to the SPV must be considered a "true sale" to keep the SPV off the sponsor's balance sheet. SPVs are structured to be bankruptcy remote from the sponsor to protect investors in case of sponsor bankruptcy. Several legal and regulatory issues surrounding SPVs and securitization must be addressed for these structures to work properly.
Collateralized Debt Obligations Presentation Final Version!James_A_McDaniel
This document provides an overview of collateralized debt obligations (CDOs) focused on commercial real estate. It discusses the taxonomy and anatomy of CDOs, including the types of assets they contain, their capital structure, and the parties involved such as issuers, investors, and rating agencies. It also describes the evolution of CDO collateral over time from assets like REIT debt and CMBS to include riskier products like whole loans, B-notes, and mezzanine loans.
This document discusses regulatory capital requirements for banks and the purpose of economic capital. It defines regulatory capital as comprising three tiers set by the Basel Committee. Regulatory capital requirements include minimum ratios of capital to risk-weighted assets. Economic capital aims to quantify the amount of capital needed to absorb potential losses over a time horizon at a given confidence level, allowing banks to compare risks and returns of different business activities.
This document discusses collateralized debt obligations (CDOs), which are securities backed by a pool of debt obligations such as loans, bonds, and other assets. CDOs issue multiple tranches (layers) of securities with varying levels of risk and return, including senior, mezzanine, and equity tranches. CDOs provide advantages such as allowing investors to customize their credit risk exposure and take on diversified credit risk. However, CDO pricing relies on rating agencies' default probabilities, which may not accurately reflect the underlying risks. Expenses also reduce returns to investors. CDOs have become a large and fast-growing sector in asset-backed securities markets globally.
This document discusses collateralized debt obligations (CDOs), which are securities backed by a pool of debt obligations such as loans, bonds, and other assets. CDOs issue multiple tranches (layers) of securities with varying levels of risk and return, including senior, mezzanine, and equity tranches. CDOs provide advantages such as allowing investors to customize their credit risk exposure and take on diversified credit risk. However, CDO pricing relies on rating agencies' default probabilities, which may not accurately reflect the underlying risks. Expenses also reduce returns to investors. CDOs have become a large and fast-growing sector in asset-backed securities markets globally.
IDFC Regular Savings Fund_Key information memorandumJubiIdfcHybrid
- The IDFC Regular Savings Fund is an open-ended hybrid scheme that invests predominantly in debt instruments.
- The primary objective is to generate regular returns through investment predominantly in debt instruments. The secondary objective is to generate long-term capital appreciation by investing a portion in equity securities.
- It aims to provide regular income and capital appreciation over medium to long term through investment predominantly in debt and money market instruments with balance exposure to equity.
IDFC Regular Savings Fund_Key information memorandumIDFCJUBI
- The IDFC Regular Savings Fund is an open-ended hybrid scheme that invests predominantly in debt instruments.
- The primary objective is to generate regular returns through investment predominantly in debt instruments. The secondary objective is to generate long-term capital appreciation by investing a portion in equity securities.
- It aims to provide regular income and capital appreciation over medium to long term through investment predominantly in debt and money market instruments with balance exposure to equity.
An Analysis of the Limitations of Utilizing the Development Method for Projec...kylemrotek
Abstract: The rise and fall of subprime mortgage securitizations contributed in part to the ensuing credit crisis
and financial crisis of 2008. Some participants in the subprime-mortgage-backed securities market relied at least
in part on analyses grounded in the loss development factor (LDF) method, and many did not conduct their own
credit analyses, relying instead on the work of others such as securities brokers and rating agencies. In some
cases, the parties providing these analyses may have lacked the independence, or at least the appearance of it, that
would have likely better served the market.
A new appreciation for the value of independent analysis is clearly a silver lining and an important lesson to be
taken from the crisis. Actuaries are well positioned to lend assistance to the endeavor.
Mortgages are long-duration assets and, similarly, mortgage credit losses are relatively long-tailed. As casualty
actuaries are aware, the LDF method has inherent limitations associated with immature development. The
authors in this paper will cite examples of parties relying on the LDF or similar methods for projecting subprime
mortgage credit losses, highlight the limitations of relying exclusively on such methods for projecting subprime
mortgage credit performance, and conclude by offering general enhancements for an improved approach that
considers the underwriting characteristics of the underlying loans as well as economic factors.
1. The document discusses areas of expertise including over 11 years of experience in corporate finance and asset securitization. It provides an overview of the Saudi economy and growth opportunities in the auto and real estate sectors.
2. Benefits to financial institutions of receivable-backed financing are outlined, including low risk and high potential returns. Hiring the author would provide a comprehensive financing solution and direct access to major industry players.
3. Profitability scenarios for financial institutions show steady portfolio growth and returns of over 2.5% annually by gradually increasing receivable-backed financing commitments over 5 years.
1. The document discusses areas of expertise including over 11 years of experience in corporate finance and asset securitization. It provides an overview of the Saudi economy and growth opportunities in the auto and real estate sectors.
2. Benefits to financial institutions of receivable-backed financing are outlined, including low risk and high potential returns. Hiring the author would provide a comprehensive financing solution and direct access to major industry players.
3. Profitability scenarios for financial institutions show steady portfolio growth and returns of over 2.5% annually by gradually increasing receivable-backed financing commitments.
IDFC Hybrid Equity Fund_Key information memorandumJubiIdfcHybrid
The document provides a key information memorandum for the IDFC Hybrid Equity Fund, an open-ended hybrid scheme that invests predominantly in equity and equity-related instruments. The fund seeks to generate long-term capital appreciation through equity exposure and current income through debt securities and money market instruments. It aims to allocate 65-80% of assets to equities and equity-related instruments and 20-35% to debt and money market instruments. The fund carries market risks associated with both equity and debt investments. It employs various strategies like diversification and derivatives to manage risks.
IDFC Hybrid Equity Fund_Key information memorandumIDFCJUBI
This document provides a summary of the IDFC Hybrid Equity Fund, an open-ended hybrid scheme that invests predominantly in equity and equity-related instruments. The fund seeks to generate long-term capital appreciation through equity exposure and current income through debt securities and money market instruments. It aims to allocate 65-80% to equities and equity-related instruments and 20-35% to debt and money market instruments including government bonds. The fund carries market, liquidity, credit, and investment risks and employs strategies like diversifying market caps and sectors for equity allocation and duration management for debt allocation to mitigate risks.
IDFC Dynamic Bond Fund_Key information memorandumIDFCJUBI
1. The IDFC Dynamic Bond Fund is an open ended dynamic debt scheme that invests across duration in money market and debt instruments including government securities. The objective is to generate optimal returns through active portfolio management.
2. The asset allocation includes investment in debt securities, money market instruments, units of REITs and InvITs between 0-100%. Up to 50% can be invested in foreign securities, securitized debt and derivatives.
3. The scheme aims to allocate assets across maturity based on interest rate views and optimize returns. It may create segregated portfolios in case of credit events or defaults to deal with liquidity risks.
IDFC Dynamic Bond Fund_Key information memorandumJubiIDFCDebt
1. The document is a Key Information Memorandum for the IDFC Dynamic Bond Fund, an open-ended dynamic debt scheme that invests across duration.
2. The fund seeks to generate optimal returns through active management of a portfolio invested in debt and money market instruments across maturities. It aims to allocate assets across fixed income instruments and durations to optimize returns based on macroeconomic conditions.
3. The fund is subject to market, liquidity, credit, reinvestment, derivatives and other risks which it aims to manage through strategies like increasing allocation to money market instruments in rising interest rate environments and focusing on government securities, corporate bonds and investments with high liquidity.
IDFC Dynamic Bond Fund_Key information memorandumTravisBickle19
1. The document provides key information about the IDFC Dynamic Bond Fund, an open-ended dynamic debt scheme. It seeks to generate optimal returns through active management across different debt and money market instruments.
2. It allows investing a minimum of Rs. 5000 for lumpsum investments and Rs. 1000 for additional purchases. Redemptions and SIP require a minimum of Rs. 500 and Rs. 1000 respectively.
3. The benchmark for evaluating performance is the Crisil Composite Bond Fund Index and dividends may be declared depending on available distributable surplus.
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This document provides an overview of the X 430.611 course on credit markets. The course will cover macroeconomic and microeconomic aspects of credit, including various credit instruments, markets, and firm-level and consumer credit decisions. It will examine bubbles, bank runs, liquidity crises and defaults from both market and individual perspectives. The slides that follow provide examples of class content, including the importance of credit, capital structures, how credit is priced based on risk, and mechanisms like securitization that distribute credit risk. The course also examines the dark side of debt through topics like how leverage can inflate bubbles and how excessive leverage can distort the economy.
IDFC Ultra Short Term Fund_Key information memorandumIDFCJUBI
1. The document is a Key Information Memorandum for the IDFC Ultra Short Term Fund, an open-ended ultra-short term debt scheme.
2. The fund seeks to generate stable returns with low risk by investing in debt and money market instruments such that the portfolio's Macaulay duration is between 3 to 6 months.
3. The fund's strategy is to invest in a diversified set of fixed income securities and money market instruments and allocate assets across maturities and ratings to optimize returns while maintaining a low risk profile.
This document discusses securitization, which involves pooling various assets and converting claims on those assets into marketable securities.
[1] Securitization allows illiquid assets like mortgages or receivables to be purchased by investors by pooling them into a special purpose vehicle that issues asset-backed securities. This provides the originator access to cheaper funding.
[2] For securitization to be "bankruptcy remote", the assets must be truly sold to the SPV and kept separate if the originator goes bankrupt, through proper formalities and preventing commingling of assets.
[3] While securitization has grown in Sri Lanka, various legal, tax and administrative issues still hinder its potential
Circular of the State Administration of Foreign Exchangefinancedude
This document outlines China's regulations regarding foreign exchange administration of financing and return investment undertaken by domestic residents through overseas special purpose vehicles. It defines key terms and outlines procedures for domestic residents to register overseas investments with foreign exchange authorities, including providing documentation when establishing or making changes to special purpose vehicles. It also specifies rules for repatriating funds and profits gained from such overseas financing arrangements.
The document announces that the Department of Industries, Government of Bihar is inviting expressions of interest from industries associations, NGOs, companies, firms or individuals to create a legal entity (Special Purpose Vehicle or SPV) to set up tool rooms in public-private partnership mode in six districts of Bihar. The tool rooms will provide technological support to MSMEs through tool design and manufacturing facilities and training programs. Interested parties should submit applications with details of their financial status and activities to the Director of Technical Development within one month.
Uppal Group and Luxor Group signed an MoU with Trinity Capital to develop a 10 million square foot SEZ in Gurgaon over 67 acres of land. As part of the agreement, Uppal Group and Luxor Group will divest partial ownership of the special purpose vehicle to Trinity Capital for Rs. 300 crore. The SEZ will include 6.5 million square feet of IT space and 3.5 million square feet of supporting infrastructure and is scheduled to be completed by 2011.
Islamic Project Finance in Saudi Arabiafinancedude
1) The article discusses the $5.8 billion financing for the $9.9 billion Petro-Rabigh project in Saudi Arabia, which included a $600 million Islamic financing tranche. This represented the first use of Islamic financing in a multi-sourced project financing in Saudi Arabia.
2) The Islamic financing structure was based on an Istisna'a (procurement agreement) and Ijara (lease), combining structures used successfully elsewhere in the Gulf. However, there was skepticism that these could work in Saudi Arabia due to legal/regulatory differences.
3) With support from Saudi authorities, a key change was allowing a "special purpose company" to enable the Islamic structure. This case
1. The thesis discusses establishing an effective special purpose vehicle (SPV) structure for financing infrastructure projects through public-private partnerships.
2. Key issues that affect SPV setup are analyzed from 12 case studies worldwide, focusing on 6 from Asia and the Middle East.
3. A proposed generic SPV framework is developed that addresses financeability, sources of funds, security agreements, sovereign support, and credit enhancement to help public and private clients establish more efficient SPVs.
Securites and Exchange Commission of Pakistanfinancedude
The document outlines rules established by the Securities and Exchange Commission of Pakistan regarding asset-backed securitization. It defines key terms like special purpose vehicle, originator, and securitization. It establishes rules for SPVs regarding registration requirements, conditions of operation, obligations for transparency, and independence from originators. The Commission is granted powers to approve advertisements, vary approvals, and cancel registrations of non-compliant SPVs. Guidelines may also be issued by the Commission to govern securitization business activities.
This document discusses special purpose vehicles (SPVs) used in securitization. It provides details on:
1) The concept and purpose of SPVs, which are established to hold securitized assets separately from the originator in order to provide bankruptcy protection to investors.
2) Examples of SPVs used in different countries, including the roles of Fannie Mae, Freddie Mac, and Ginnie Mae in the US mortgage market, as well as structures used in Argentina and Morocco.
3) The use of SPVs in India and desired characteristics such as bankruptcy remoteness, independent corporate existence, and tax neutrality. It evaluates companies, trusts, and mutual funds as potential SPV structures.
This document summarizes regulations passed in Guernsey that allow two additional classes of companies to be established as protected cell companies. The two new classes are: 1) Companies established to issue bonds or debt securities where repayments are funded from investment proceeds and 2) Companies established to conduct finance business not already supervised under other laws. The regulations were made by the Guernsey Financial Services Commission and went into effect on February 6, 2001.
Securitization: Establishing a Special Purpose Vehicle in Guernseyfinancedude
This document provides an overview of establishing a special purpose vehicle (SPV) in Guernsey for securitization. It discusses that the SPV would be held by a charitable trust for off-balance sheet treatment. The SPV would require directors, administration services, and regulatory approval. Costs for establishing the SPV and trust are estimated, including incorporation fees, annual administration fees, and legal fees. Key steps for establishing the structure are outlined.
The document provides the implementing rules and regulations for the Special Purpose Vehicle (SPV) Act of 2002. It defines key terms related to SPVs, non-performing assets, and financial institutions. It also outlines requirements for establishing an SPV, including that it must be organized as a stock corporation and that at least 60% of its capital stock must be owned by Philippine nationals if it will acquire land. The powers of an SPV are also summarized, which primarily involve investing in or acquiring non-performing assets from financial institutions.
This modification notice modifies certain rules for Gulf Fund Management Limited relating to property funds. Specifically, it allows for:
- Private property funds to permit unit buybacks and resales subject to certain conditions.
- Operators of private investment trust property funds to not be required to appoint an investment committee.
- Use of special purpose vehicles to hold real property for a property fund subject to conditions.
Structured Finance: Use and Abuse of Special-Purpose Entitiesfinancedude
This document discusses the legitimate and illegitimate uses of special purpose entities (SPEs). It begins by defining SPEs and explaining their legitimate uses, such as facilitating securitizations and balance sheet management. However, SPEs can also be abused, as seen in the Enron scandal. Enron used SPEs set up by JPMorgan to disguise loans as revenue. The document examines this transaction and how JPMorgan hedged its Enron exposure through surety bonds instead of more explicit credit derivatives. Overall, the document outlines both proper and improper applications of SPEs.
The document discusses how development credit programs can help unlock private financing for clean energy projects in Asia. It provides examples of how USAID's Development Credit Authority uses loan guarantees and other credit support mechanisms to catalyze investment in renewable energy, energy efficiency, and other sectors. By mitigating risks for lenders, credit guarantees can help address capital constraints and accelerate the transition to sustainable energy.
Enron, JPMorgan, and Offshore Special Purpose Vehiclesfinancedude
J.P. Morgan lost $965 million when Enron declared bankruptcy. It had believed the contracts were hedged by surety bonds from insurers, but the insurers argued they were victims of fraud by J.P. Morgan and Enron. The document analyzes transactions between Enron, J.P. Morgan, and offshore entities that appear to disguise a $330 million loan from J.P. Morgan to Enron as commodity futures contracts. When the case went to trial, the judge ruled evidence of a "disguised loan" could be used, and J.P. Morgan settled for $600 million rather than risk further losses.
Expression of Interest for Formation of Joint Venture Companyfinancedude
The document discusses the formation of a joint venture special purpose vehicle (SPV) between Ircon International Limited and two other companies to bid on contracts for the construction of a new Dedicated Freight Corridor in India. The SPV would have Ircon lead the track and electrical work, one company handle civil works, and the other focus on signaling and telecommunications. Selection of the partners would consider their experience, financial health, specialized knowledge, and past performance on similar infrastructure projects.
This document describes a special purpose vehicle that would securitize a pool of international bonds. The special purpose vehicle would issue trust certificates representing fractional interests in the underlying bond pool. These certificates could then be subscribed to by entities that owe debts to the bond-issuing country, allowing them to legally set off and cancel their debts at a discounted rate through the purchase and retirement of the bond certificates. The program aims to monetize the intrinsic bond value, preserve bondholder claims, generate liquidity, and stimulate market-driven resolution of defaulted sovereign debt.
Special Purpose Entities in the Public Sectorfinancedude
This document discusses the statistical treatment of special purpose entities (SPEs) in the public sector. It considers whether SPEs should be classified as institutional units and how their residence should be determined. It also addresses how to sectorize SPEs that are classified as institutional units, focusing on indicators of control and the nature of the SPE's activities. The document provides several options for the statistical treatment of both domestic and foreign SPEs affiliated with government.
Special Purpose Vehicals Securitizationfinancedude
Special Purpose Entities (SPEs) are legal entities created for specific purposes in structuring securitization transactions. SPEs are critical components of the $5.2 trillion U.S. securitization market, which provides liquidity to financial institutions and consumers through products like mortgages and credit cards. SPEs hold pools of financial assets, issue securities to investors, and protect investors from bankruptcy risk of the financial institution that established the SPE. Accounting standards require disclosure of risks and obligations associated with SPE transactions, even if the SPE is not consolidated on the financial institution's balance sheet.
Development of Special-Purpose Vehiclasfinancedude
IAV provides expertise in developing special-purpose vehicles from initial design concepts through testing and integration into production. This includes developing vehicle package layouts, integrating additional electrical and mechanical components while maintaining quality interior design, designing wiring harnesses and control units, and testing prototypes. IAV then supports integrating the customized vehicles into clients' production processes. The goal is to customize vehicles for uses such as police, ambulances, and taxis in a cost-effective manner within 18-24 months from concept to production.
Abhay Bhutada Leads Poonawalla Fincorp To Record Low NPA And Unprecedented Gr...Vighnesh Shashtri
Under the leadership of Abhay Bhutada, Poonawalla Fincorp has achieved record-low Non-Performing Assets (NPA) and witnessed unprecedented growth. Bhutada's strategic vision and effective management have significantly enhanced the company's financial health, showcasing a robust performance in the financial sector. This achievement underscores the company's resilience and ability to thrive in a competitive market, setting a new benchmark for operational excellence in the industry.
Independent Study - College of Wooster Research (2023-2024) FDI, Culture, Glo...AntoniaOwensDetwiler
"Does Foreign Direct Investment Negatively Affect Preservation of Culture in the Global South? Case Studies in Thailand and Cambodia."
Do elements of globalization, such as Foreign Direct Investment (FDI), negatively affect the ability of countries in the Global South to preserve their culture? This research aims to answer this question by employing a cross-sectional comparative case study analysis utilizing methods of difference. Thailand and Cambodia are compared as they are in the same region and have a similar culture. The metric of difference between Thailand and Cambodia is their ability to preserve their culture. This ability is operationalized by their respective attitudes towards FDI; Thailand imposes stringent regulations and limitations on FDI while Cambodia does not hesitate to accept most FDI and imposes fewer limitations. The evidence from this study suggests that FDI from globally influential countries with high gross domestic products (GDPs) (e.g. China, U.S.) challenges the ability of countries with lower GDPs (e.g. Cambodia) to protect their culture. Furthermore, the ability, or lack thereof, of the receiving countries to protect their culture is amplified by the existence and implementation of restrictive FDI policies imposed by their governments.
My study abroad in Bali, Indonesia, inspired this research topic as I noticed how globalization is changing the culture of its people. I learned their language and way of life which helped me understand the beauty and importance of cultural preservation. I believe we could all benefit from learning new perspectives as they could help us ideate solutions to contemporary issues and empathize with others.
Seminar: Gender Board Diversity through Ownership NetworksGRAPE
Seminar on gender diversity spillovers through ownership networks at FAME|GRAPE. Presenting novel research. Studies in economics and management using econometrics methods.
2. Elemental Economics - Mineral demand.pdfNeal Brewster
After this second you should be able to: Explain the main determinants of demand for any mineral product, and their relative importance; recognise and explain how demand for any product is likely to change with economic activity; recognise and explain the roles of technology and relative prices in influencing demand; be able to explain the differences between the rates of growth of demand for different products.
STREETONOMICS: Exploring the Uncharted Territories of Informal Markets throug...sameer shah
Delve into the world of STREETONOMICS, where a team of 7 enthusiasts embarks on a journey to understand unorganized markets. By engaging with a coffee street vendor and crafting questionnaires, this project uncovers valuable insights into consumer behavior and market dynamics in informal settings."
BONKMILLON Unleashes Its Bonkers Potential on Solana.pdfcoingabbar
Introducing BONKMILLON - The Most Bonkers Meme Coin Yet
Let's be real for a second – the world of meme coins can feel like a bit of a circus at times. Every other day, there's a new token promising to take you "to the moon" or offering some groundbreaking utility that'll change the game forever. But how many of them actually deliver on that hype?
Falcon stands out as a top-tier P2P Invoice Discounting platform in India, bridging esteemed blue-chip companies and eager investors. Our goal is to transform the investment landscape in India by establishing a comprehensive destination for borrowers and investors with diverse profiles and needs, all while minimizing risk. What sets Falcon apart is the elimination of intermediaries such as commercial banks and depository institutions, allowing investors to enjoy higher yields.
In a tight labour market, job-seekers gain bargaining power and leverage it into greater job quality—at least, that’s the conventional wisdom.
Michael, LMIC Economist, presented findings that reveal a weakened relationship between labour market tightness and job quality indicators following the pandemic. Labour market tightness coincided with growth in real wages for only a portion of workers: those in low-wage jobs requiring little education. Several factors—including labour market composition, worker and employer behaviour, and labour market practices—have contributed to the absence of worker benefits. These will be investigated further in future work.
Vicinity Jobs’ data includes more than three million 2023 OJPs and thousands of skills. Most skills appear in less than 0.02% of job postings, so most postings rely on a small subset of commonly used terms, like teamwork.
Laura Adkins-Hackett, Economist, LMIC, and Sukriti Trehan, Data Scientist, LMIC, presented their research exploring trends in the skills listed in OJPs to develop a deeper understanding of in-demand skills. This research project uses pointwise mutual information and other methods to extract more information about common skills from the relationships between skills, occupations and regions.
Does teamwork really matter? Looking beyond the job posting to understand lab...
MBIA's CDO Strategy
1. [Note: the following provides a description of MBIA’s strategy and approach to insuring CDOs. For information
regarding MBIA’s exposures to CDOs and subprime RMBS, please see the Company’s Quarterly Operating
Supplements (available at http://investor.mbia.com/phoenix.zhtml?c=88095&p=irol-operating) and the Investor
Inquiries/FAQs section of the Company’s website (http://www.mbia.com/investor/investor_inquiries_faqs.html).]
MBIA’s CDO Strategy
What are CDOs?
Collateralized Debt Obligations (CDOs) are among the tools that financial institutions are
increasingly using to manage credit exposure and capital (regulatory or economic). CDOs
involve the transfer of credit risk with respect to large, well-diversified pools of corporate, asset-
backed securities and sovereign bonds and loans to special purpose vehicles, whose securities
are broadly distributed. CDOs, like traditional securitizations, use the capital markets as a
means of transferring credit and other risks to investors. Like securitizations of mortgages, auto
loans, credit cards, trade receivables and other financial assets, the credit risk associated with a
CDO is tranched into several quot;riskquot; layers, with investors buying into each of the different levels
based on differing appetites for credit risk, liquidity risk and duration risk and, as a
consequence, accept different corresponding levels of return. CDOs can include both cash
assets (bonds or loans) and/or synthetic assets (credit default swaps) and can be either actively
managed or static (the assets remain the same over time).
What is MBIA's underwriting approach to CDOs?
MBIA's approach to underwriting CDOs comprises four primary components: First: MBIA
evaluates the proposed collateral pool. For each transaction MBIA reviews the proposed
portfolio by performing several analyses of the collateral pool to ascertain its overall credit
quality and also to identify collateral with characteristics outside of norms for its asset class. All
proposed corporate portfolios are run through market credit screening tools such as the KMV or
Kamakura models to assess the overall credit quality of the pool and to determine if any
collateral has a potentially higher default propensity than its current ratings might suggest. The
KMV and Kamakura models are important tools used both in the initial review process, as well
as on an ongoing basis over the deal's life for portfolio monitoring purposes. They estimate
credit risk and correlation using equity market data. MBIA also uses one or more credit spread
services to assess the overall spread characteristics of the pool to detect any proposed assets
with spread wider than its peers by rating band. MBIA also compares the proposed collateral
pool to MBIA's total CDO exposures to ascertain collateral overlap among transactions and the
incremental exposure provided by any single piece of collateral given the subject transaction.
Finally, MBIA's Corporate Analytics Group provides a fundamental assessment of certain
names in the pool, e.g. names with higher KMV or Kamakura scores (a higher score suggests
greater credit risk) or collateral obligors whose spreads are wide relative to peers. Based on its
analysis, MBIA may require certain loans or bonds to be removed from the portfolio and/or that
concentrations be reduced relative to industry or specific collateral.
For Multi-Sector CDOs of ABS (including RMBS collateral as well as other assets), MBIA
utilizes the extensive structured finance expertise of its New Business, Underwriting and Insured
Portfolio Management (surveillance) groups to undertake a rigorous analysis of each piece of
the underlying collateral. The proposed portfolio is reviewed by experts in each asset class, with
respect to quality of seller/servicer, composition of the underlying receivables backing each
bond, historical performance of the asset class and underwriting trends in each asset class. All
transactions have a matrix of concentration limits that restrict exposure to single issuers,
2. product types, geographic regions or other risk classifications in order to provide a diversified
pool of exposure. MBIA is a significant participant in the global structured finance market, and
access to expertise in various asset classes gives the Company an important advantage when
underwriting CDOs of ABS.
Second: For managed CDOs, MBIA evaluates the quality of the collateral manager through
extensive on-site due diligence. MBIA considers the quality of the collateral manager as
essential to the successful performance of a managed CDO. MBIA has a dedicated Corporate
Analytics Group that evaluates collateral managers, assigns internal ratings to the collateral
managers based on its assessment of the managers’ ability to select and manage the asset
class and then monitors each manager's performance. This unit works closely with MBIA's
surveillance group to constantly monitor and proactively manage transactions once they are
closed. The MBIA insured CDO are structured to take into account the skills and capabilities of
the approved CDO collateral manager.
Third: MBIA undertakes extensive cash flow and quantitative modeling for each CDO
transaction using internal models and the Moody's and S&P models to confirm the rating
analysis and proposed attachment points. MBIA’s proprietary CDO model generates proposed
collateral default and recovery rates which feed a full cash flow model. For funded transactions,
MBIA runs all of its own stress case cash flow analyses utilizing a variety of timing scenarios for
default rates and recovery timing, as well as various interest rate scenarios. All stress case
scenarios must pass the no-loss standard (i.e., no losses are projected under reasonable worst
case assumptions) in order to meet MBIA's credit approval requirements. MBIA typically
requires Multi-Sector ABS and synthetic corporate transactions to have credit support levels
well in excess of the Triple-A rating levels required by the rating agencies.
Fourth: MBIA, along with external legal counsel, evaluates the legal structure and documents to
ensure they meet all of MBIA's standards. MBIA retains the right to remove and replace the
collateral manager should certain events occur, including erosion in the value of securities
providing over-collateralization for the most senior class of the transaction and certain events
relating to the collateral manager's performance. Performance triggers in the CDO that protect
the senior risk layer which MBIA is guaranteeing are critical to MBIA’s transactions.
What is the business strategy behind MBIA's CDOs?
MBIA’s overall business strategy is to participate in the most senior layer of the CDO capital
structure while creating a balanced book of business across multiple underlying asset classes
including Investment Grade Corporates, High Yield Loans, ABS/RMBS, CMBS and Emerging
Markets.
Post 1999, MBIA has focused on insuring (i) funded CDOs having minimum Double-A shadow
ratings by both Moody's and S&P (although almost all funded CDOs done by MBIA in the last 5
years have been at a minimum Triple-A level) and (ii) synthetic CDOs at the super Triple-A level
by virtue of a rated Triple-A tranche subordinate to MBIA or by virtue of an attachment point that
is a multiple of the Triple-A requirement imposed by the rating agencies.
MBIA is an active participant in the Multi-Sector ABS CDO market. MBIA, along with most
market participants, segments this sector into two categories of deals: “High Grade” and
“Mezzanine”, reflecting the credit ratings on the underlying structured finance bonds supporting
the CDO.
3. “High Grade” refers to transactions in which the underlying collateral credit ratings on a stand
alone basis are Single-A or higher, and “Mezzanine” refers to transactions in which the
underlying collateral credit ratings on a stand alone basis are below Single-A (generally Triple-
B). Starting in 2004 MBIA elected to insure Mezzanine ABS CDOs only on a more selective
basis due to concerns regarding structural provisions as well as concerns over the underlying
collateral and weak pricing. MBIA has been a much more active player in the High Grade space
where deals are characterized by much stronger collateral, better structural provisions, and
more attractive risk adjusted pricing. MBIA typically guarantees Multi-Sector CDOs transacted
at the “Super Triple-A” credit support level – which most often means 1.5x to 2.5x the credit
support level of the rated triple-A tranches that are subordinate to the tranche that MBIA
guarantees.
How are CDOs structured?
A CDO consists of various layers of risk with the more junior layers having more leveraged or
concentrated risks and the more senior layers having less risk. This “tranching” permits different
investors with different risk appetites to participate in those risk layers with which they are more
comfortable. Investors seeking yield (equity players mainly) may leverage their credit risk and
returns by investing in the quot;first-lossquot; layers. Other investors seeking a somewhat lower
risk/return profile may invest in the middle layers of risk (these layers are also sometimes
referred to as “Mezzanine” or “Junior”), which are usually rated at the low investment grade or
high speculative grade levels. The equity and Mezzanine/Junior layers are known as “risk
layers.”
Risk-averse investors can participate in the lower risk/lower return segments of the capital
structure, including the quot;super-seniorquot; tranche or what is generally called the quot;capacityquot; layer.
This layer is often referred to as quot;superquot; Triple-A because a layer below it is rated Triple-A by
the rating agencies. This layer is most appealing to the monoline insurers because it is
consistent with their overall business model displaying low levels of rating volatility and
extremely low default propensity and, in the unlikely event of defaults, very low loss severity. In
addition, because monoline insurers seek to mitigate the risk of correlated defaults, the most
senior, highly rated capacity layers, with all their underlying protection, safeguard the monoline
insurers from the risk of correlated defaults.
All subprime RMBS bonds, as well as CDOs containing this collateral, are not created equal.
Losses will not be distributed evenly across all underlying collateral and CDOs. Losses will vary
significantly based on how the mortgage originator underwrites the loans, how the servicer
administers the loans, the characteristics of the loan portfolio as selected by the CDO manager,
and the CDO transaction’s structure.
How are MBIA's Corporate Synthetic CDOs structured?
MBIA has structured its synthetic corporate CDO transactions to be able to withstand a very
large number of investment grade corporate defaults, typically about 10 times average historical
default rates and more than 5 times historical peak maximum default rates before losing a single
dollar. MBIA views the possibility of defaults approaching this level as an extremely unlikely and
catastrophic event, approaching a global meltdown of corporate credit. The extreme level of
protection also serves to protect against rating volatility in MBIA's back book of exposures. In
this product area, protecting against adverse portfolio construction is a key factor in MBIA’s
credit underwriting process. (Please refer to “What is MBIA’s underwriting approach to CDOs?”
above.)
4. What are the mark-to-market considerations for CDOs?
As required by SFAS 133, MBIA marks to market all its credit derivatives through the income
statement. The periodic mark-to-market introduces a degree of income statement volatility as
credit spreads move, but it is not a good indicator of ultimate losses for MBIA. This is because
MBIA does not trade the risk, but holds it to maturity. Because of the very low default probability,
the cumulative marks to market on each individual synthetic CDO guarantee will, in all
likelihood, ultimately go to zero provided there are no actual losses. MBIA will only have to pay
a loss in the highly unlikely event that a CDO experiences an extraordinary number of defaults,
which completely eliminates all subordinate tranches, including in most cases those rated
Triple-A at inception.
What is MBIA’s outlook regarding the CDOs in its insured portfolio?
MBIA does not expect its insured CDO portfolio to pose a risk to its ratings nor does it expect
that it will represent a material risk to the Company’s financial condition. MBIA believes that its
disciplined underwriting approach, which requires high quality collateral managers and servicers
and a review of the underlying collateral within each CDO, have resulted in subprime exposure
consistent with our zero loss standard.
Multi-Sector CDO Portfolio Overview:
Multi-Sector CDOs are transactions that include a variety of structured finance asset classes in
the collateral pools. The collateral in the Company’s Multi-Sector CDOs includes asset-backed
securities (e.g. securitizations of auto receivables, credit cards, etc.), commercial mortgage-
backed securities, CDOs and various types of residential mortgage-backed securities including
prime and subprime RMBS. This range of asset classes is found throughout the entire Multi-
Sector CDO portfolio, which is comprised of transactions that rely on underlying collateral rated
Single-A or above (High Grade CDOs) and in transactions that rely on collateral primarily rated
Triple-B (Mezzanine CDOs). This highly diversified portfolio of asset classes results in a very
low correlation of risk. Therefore, for instance, a troubled RMBS security (or pool of securities)
in a CDO would not necessarily cause losses for MBIA, given the over-collateralization in the
CDO, the cash allocation mechanics in the structures, and MBIA’s senior position in the capital
structure.
MBIA guarantees CDOs in the primary and secondary markets.
MBIA, along with most market participants, segments Multi-Sector CDOs into “High Grade” and
“Mezzanine,” categories, reflecting the credit ratings on the underlying asset-backed securities
backing the CDO. High Grade collateral pools consist mostly of Double-A, and Triple-A-rated
collateral tranches (with smaller buckets for Single-A collateral) of structured finance securities.
Mezzanine collateral pools consist primarily of Triple-B-rated tranches of structured finance
securities with small buckets (typically <10%) of Double-B-rated tranches. While the collateral in
these Mezzanine transactions is generally rated Triple-B, MBIA attaches at a much higher
ratings level in the CDO structure, predominantly Triple-A or “Super Triple-A.”
The majority of MBIA’s multi-sector CDOs with U.S. subprime RMBS have credit enhancement
protecting MBIA’s insured obligations that is equal to 1.5 – 2.0x (and occasionally as much as
3.0x) the Triple-A requirement established by the rating agencies. This level of credit support
provides a significant level of cushion above the extremely unlikely losses that would need to
occur to reach into the Triple-A level.
MBIA’s underwriting process includes a review of each piece of collateral in the portfolio to
ensure soundness of credit, appropriateness of rating and consistency with the manager’s skills
5. and strategy. As described earlier, MBIA’s CDO underwriting process for managed transactions
includes a detailed review of the collateral manager’s strategy, personnel, financial strength and
operational capabilities through extensive on-site due diligence meetings. MBIA will not insure a
transaction, regardless of attachment point, when the manager does not pass this review.