financial-crisis

Learning objectives: Summarize the clearing process in OTC derivative markets. Describe changes to the regulation of OTC derivatives which took place after the 2007-2009 financial crisis and explain the impact of these changes. Questions: 20.6.1. The diagram below plots the exposures of three...

Learning objectives: Describe the historical background and provide an overview of the 2007-2009 financial crisis. Describe the build-up to the financial crisis and the factors that played an important role. Explain the role of subprime mortgages and collateralized debt obligations (CDOs) in the...

Learning objectives: Compare different types of credit derivatives, explain how each one transfers credit risk and describe their advantages and disadvantages. Explain different traditional approaches or mechanisms that firms can use to help mitigate credit risk. Evaluate the role of credit...

Learning objectives: Distinguish between triggers and vulnerabilities that led to the financial crisis and their contributions to the crisis. Describe the main vulnerabilities of short-term debt especially repo agreements and commercial paper. Assess the consequences of the Lehman failure on the...

Learning objectives: Define and calculate the delinquency ratio, default ratio, monthly payment rate (MPR), debt service coverage ratio (DSCR), the weighted average coupon (WAC), the weighted average maturity (WAM), and the weighted average life (WAL) for relevant securitized structures. Explain...