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DAVOS: Rating CDOs - CDO Ratings Hit Troubled Waters - Christian Stracke Outlines Five Key Areas Where CDO Ratings Methodology - And Structured Finance Ratings More Generally - Need To Be Improved In Order To Help Restore Confidence In The Structured Fina.
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The Banker
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January 1, 2008
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Copyright informationCOPYRIGHT 2008 FT Business. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Byline: CHRISTIAN STRACKE
The dramatic rise in US subprime mortgage foreclosure rates may have been the initial driver of the recent turmoil in global credit markets, but as the crisis has intensified, more and more attention has been paid to the market's poor understanding of risks embedded in the world of structured finance.
Portions of asset-backed securities (ABSs) - most notoriously those ABSs backed by subprime mortgages but also commercial mortgage-backed securities (CMBSs) and other ABS sectors - that were supposed to carry little to no risk are now not only seen to be very risky, but in many cases are essentially worthless. Blame for the debacle can and ...
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