Comment by: Anonymous. Posted 15 years ago [2009-02-10 14:31:10]

Perhaps greater regulation needs to be applied to the investors, so they are compelled to invest more time in understanding what they are buying. Bankers should indeed be accountable to their shareholders for taking prop positions in CDO's, but the onus for judging investment risks is on investors. The investing institutions / asset managers should be accountable to their stakeholders. Perhaps some investors were biased towards investing, as not doing so would have eliminated their 'dedicated structured products' jobs.

Comment by: Anonymous. Posted 15 years ago [2009-02-10 11:00:28]

Perhaps greater regulation needs to be applied to the investors, so they are compelled to invest more time in understanding what they are buying. Bankers should indeed be accountable to their shareholders for taking prop positions in CDO's, but the onus for judging investment risks is on investors. The investing institutions / asset managers should be accountable to their stakeholders. Perhaps some investors were biased towards investing, as not doing so would have eliminated their 'dedicated structured products' jobs.

Comment by: Anonymous. Posted 15 years ago [2009-02-06 13:23:25]

I think also that until rating agencies have finished the over-haul of their rating criteria and assumptions etc and until Basel II is further fine tuned in light of the current turmoil, the uncertainty surrounding all these will not encourage investors to hurry back to the structured credit world

Comment by: Mike Peterson. Posted 15 years ago [2009-02-05 18:35:25]

Credit investors are not trying to get leverage at the moment (which is just as well since it is not available). The game of the moment is to look at the unlevered returns available on credit (of all kinds) and try to figure out if they justify the risk. But as sure as the sun rises, we will at some future date find ourselves gazing out at a benign credit horizon which offers thin returns. The question then is what is the best way to leverage credit. There are an infinite number of ways credit can be leveraged - with ratings or without, funded or unfunded, managed or unmanaged - and there is no certainty that structured credit products of the future will take the form of CDOs. But they will certainly be the descendents of CDOs and, hopefully, will be better constructed as a result of our historical experience of CBOs, CDOs of ABS, CLOs, CSO, credit hedge funds and the like.