Drying up down under

Liquidity in Australia's nascent structured credit market has suffered as a result of the subprime squeeze, leading to an inevitable bout of finger-pointing. Marion Williams reports

Australian investors have so far been hit hard three times by the US subprime loans debacle and the ensuing liquidity crisis for leveraged credit structures. Just one of Australia's publicly known incidents involves a collateralised debt obligation with exposure to US subprime loans. The other two relate to investment through structured credit investment manager Absolute Capital and hedge fund Basis Capital, both Sydney-based firms. On the whole, the countries' institutions seem to have fared

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Credit risk & modelling – Special report 2021

This Risk special report provides an insight on the challenges facing banks in measuring and mitigating credit risk in the current environment, and the strategies they are deploying to adapt to a more stringent regulatory approach.

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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