CDO-Squared

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CDO-Squared is a collateralized debt obligations 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 in June 2018.[4]

References[edit]

  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.