Market Graphic - Subprime haircuts

The ignominious near-implosion of Bear Stearns' Enhanced Leverage fund has prompted much concern about the vulnerability of other funds with exposure to subprime and CDOs of ABS (collateralised debt obligations of asset-backed securities). Near term, the biggest risk is probably that of forced selling driven by potential margin calls (haircut increases) or investor redemptions.

Although the strategies that Bear employed - buying highly illiquid assets with only short-term investor lock-ins, a

To continue reading...

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an indvidual account here: