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A new twist to ABS

Recent activity in the synthetic CDO market suggests that this asset class may become a common feature in the Asia-Pacific region. Nick Sawyer reports from Tokyo and Hong Kong

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The securitisation market has long been popular with both issuers and investors in the Asia-Pacific region. Since the Asian economic meltdown in 1997–98, it has offered an escape route for low rated Asian banks to raise funds and manage risk by restructuring low-rated loans into highly-rated investment vehicles. And now the landscape appears to be slowly changing. In recent months, synthetic

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The wild world of credit models

The Covid-19 pandemic has induced a kind of schizophrenia in loan-loss models. When the pandemic hit, banks overprovisioned for credit losses on the assumption that the economy would head south. But when government stimulus packages put wads of cash in…

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