The start of the market

Since the collateralisation of debt instruments was first developed and applied to mortgage bonds in the 1980s, the market has grown at an exponential rate and quickly been adopted to cover practically every type of debt

Clare Island, Galway Bay, Copernicus, Concerto, Thunderbird. The names are more likely to conjure up images of the racecard on Grand National Day than of a menu of financial products. These, and hundreds of other equally colourfully named instruments, are examples of collateralised debt obligations (CDOs), which in recent years have been among the fastest-developing investment vehicles in the financial services industry. As the rating agency Moody’s noted in its Review of activity in the