CDO-Squared is a collateralized debt obligation backed primarily by the tranches issued by other CDOs.[1] These instruments became popular before the financial crisis of 2007–08. There were 36 CDO-Squared deals made in 2005, 48 in 2006 and 41 in 2007. Merrill Lynch was a big producer, creating and selling 11 of them.[2]

The collapse of the market for collateralized debt obligations and CDO-Squared contributed to the 2008 subprime mortgage crisis.[3] Goldman Sachs appears to be the last bank to hold CDOs-Squared, holding $50 million (~$57.7 million in 2022) in June 2018.[4]

[5]

References

  1. "CDOs-Squared Demystified" (PDF). Nomura Fixed Income Research. 2005. Retrieved 2018-10-04.
  2. The Financial Crisis Inquiry Report, 2011, p.203
  3. "Collateralized Debt Obligation Squared - CDO-Squared". Investopedia. Retrieved 2018-10-04.
  4. Woodall, Louie (2018-10-03). "Goldman Sachs is last major bank holding CDO squared". Risk Quantum.
  5. "CDO Library : Financial Crisis Inquiry Commission".

Sources

This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.