The U.S. Subprime Crisis and the CDO Troubles

The prolonged weakening in the U.S. subprime mortgage market has grown to become a global event in 2007. The growing default rates have let down a number of weighty players, ranging from HSBC to Bear Sterns hedge funds and then to the most recent Northern Rock - the U.K.'s fifth largest mortgag...

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Main Author: Liu, Yuan
Format: Dissertation (University of Nottingham only)
Language:English
Published: 2007
Subjects:
Online Access:https://eprints.nottingham.ac.uk/21254/
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author Liu, Yuan
author_facet Liu, Yuan
author_sort Liu, Yuan
building Nottingham Research Data Repository
collection Online Access
description The prolonged weakening in the U.S. subprime mortgage market has grown to become a global event in 2007. The growing default rates have let down a number of weighty players, ranging from HSBC to Bear Sterns hedge funds and then to the most recent Northern Rock - the U.K.'s fifth largest mortgage lender. As the stock market is becoming increasingly volatile, questions begin to accumulate. Essentially, these questions break down into: how and why did a massive number of defaults emerge? how are the difficulties in the subprime market passed on to the financial markets, in particular the CDO market? and, where are all these heading for? This dissertation looks into the current U.S. subprime turmoil with an approach that combines a review of the existing theoretical arguments in the related areas with the current market data. In particular, the paper explores the likely impact of the elevated subprime defaults on CDOs by the means of a case study on certain ABS sectors. As the findings shed a light on today's crisis, implications are also drawn on the outlook of the broader capital markets as well as the U.S. economy. The author agues that the causes of wide-spreading U.S. subprime turmoil fundamentally lie in the issues around the subprime mortgage market and the securitization market. As a result, there is a strong need to draw policy implications to practitioners in the industry.
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spelling nottingham-212542017-12-27T16:40:13Z https://eprints.nottingham.ac.uk/21254/ The U.S. Subprime Crisis and the CDO Troubles Liu, Yuan The prolonged weakening in the U.S. subprime mortgage market has grown to become a global event in 2007. The growing default rates have let down a number of weighty players, ranging from HSBC to Bear Sterns hedge funds and then to the most recent Northern Rock - the U.K.'s fifth largest mortgage lender. As the stock market is becoming increasingly volatile, questions begin to accumulate. Essentially, these questions break down into: how and why did a massive number of defaults emerge? how are the difficulties in the subprime market passed on to the financial markets, in particular the CDO market? and, where are all these heading for? This dissertation looks into the current U.S. subprime turmoil with an approach that combines a review of the existing theoretical arguments in the related areas with the current market data. In particular, the paper explores the likely impact of the elevated subprime defaults on CDOs by the means of a case study on certain ABS sectors. As the findings shed a light on today's crisis, implications are also drawn on the outlook of the broader capital markets as well as the U.S. economy. The author agues that the causes of wide-spreading U.S. subprime turmoil fundamentally lie in the issues around the subprime mortgage market and the securitization market. As a result, there is a strong need to draw policy implications to practitioners in the industry. 2007 Dissertation (University of Nottingham only) NonPeerReviewed application/pdf en https://eprints.nottingham.ac.uk/21254/1/MAlixyl352007 Liu, Yuan (2007) The U.S. Subprime Crisis and the CDO Troubles. [Dissertation (University of Nottingham only)] (Unpublished) Subprime Mortgages Subprime Crisis RMBS CDOs
spellingShingle Subprime Mortgages
Subprime Crisis
RMBS
CDOs
Liu, Yuan
The U.S. Subprime Crisis and the CDO Troubles
title The U.S. Subprime Crisis and the CDO Troubles
title_full The U.S. Subprime Crisis and the CDO Troubles
title_fullStr The U.S. Subprime Crisis and the CDO Troubles
title_full_unstemmed The U.S. Subprime Crisis and the CDO Troubles
title_short The U.S. Subprime Crisis and the CDO Troubles
title_sort u.s. subprime crisis and the cdo troubles
topic Subprime Mortgages
Subprime Crisis
RMBS
CDOs
url https://eprints.nottingham.ac.uk/21254/