Structured finance, risk management, and the recent financial crisis

Georges Dionne ()

No 09-6, Working Papers from HEC Montreal, Canada Research Chair in Risk Management

Abstract: Structured finance is often mentioned as the main cause of the latest financial crisis. We argue that structured finance per se did not trigger the last financial crisis. The crisis was propagated around the world because of poor risk management such as agency problems in the securitization market, poor rating and pricing standards, rating agency incentives, lack of market transparency, the search for higher yields by top decision makers and the failure of regulators and central banks to understand the implications of the changing environment.

Keywords: Structured finance; risk management financial crisis; collateral debt obligation (CDO); asset back commercial paper (ABCP); rating; pricing; securitization; regulation of financial markets (search for similar items in EconPapers)
JEL-codes: D81 D82 D86 E50 G01 G12 G14 G32 G33 (search for similar items in EconPapers)
Pages: 6 pages
Date: 2009-10-20
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Working Paper: Structured Finance, Risk Management, and the Recent Financial Crisis (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ris:crcrmw:2009_006

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