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I'm not sure this is true. If the packagers of the non-synthetic CDOs realized no benefit from Synthetic CDOs being made off of theirs why would they have incen
by jamiequint 17y ago
I'm not sure this is true. If the packagers of the non-synthetic CDOs realized no benefit from Synthetic CDOs being made off of theirs why would they have incentive to cater to the Synthetic CDO creators.
- btilly 17y agoThe market for synthetic CDOs like this only arose because the demand for low quality debt exceeded the available supply. Evidence that demand exceeds supply is encouragement to create more low quality debt. So no, it is not a direct connection. But it is indirect encouragement.