Do you know what is a CLO?
A collateralised loan obligation is a security backed by a pool of debt, often low-rated corporate loans.
"Typically, only large institutional investors purchase tranches in a CLO. This means companies of scale, such as insurance companies, quickly purchase senior level debt tranches to ensure low risk and steady cash flow. Mutual funds and ETFs normally purchase junior level debt tranches with higher risk and higher interest payments. If an individual investor invests in a mutual fund with junior debt tranches, that investor takes on the proportional risk of default".
Banks and large institutions don't need governmental control, no things can go wrong!
Tell me about Lehman Brothers....
This is, as for subprime, a multitude of bad loans grouped and packaged to be sold to investors. This time, it is not about loans from individuals who can not afford to borrow, but loans from corporates who should no longer be able to borrow because they are already over-indebted.
You already have the first season in 2008 with the Subprimes versions! You will love the second season: CLO…..
Loans made to Sears, today under US bankruptcy laws, such nice loans are repackaged with a rating agencies stamp and sell to others banks who will sells them to their clients.
Cheers.
And Governments are talking about the insecurity of tokens?