securitised

How, indeed? Moreover, one of the features of the crisis is how widely distributed securitised loans turned out to be.

Assets were bundled into a pool, securitised, stuffed into a CDO, bits of that plugged into the next CDO and so on and on.

The only thing it needed to know about complex securitised products was that there was no good reason to buy them.

Indeed, many bankers are now trying to find ways to make securitised products attractive to investors again.

Second, these events have called into question the workability of securitised lending, at least in its current form.

Activity in the secondary markets for securitised products dried up as well, as investors stopped trading except if forced into a fire-sale.

Now we see Hank Paulson, US Treasury secretary, trying to organise a cartel of holders of toxic securitised assets in the "superSIV" .

This was a profitable strategy until the crisis in subprime US mortgages and securitised finance undermined investor confidence.

Toxic assets are no longer just a pile of securitised subprime US mortgages.

The early chapters describe one complex deal after another, and it becomes hard to see the wood for the securitised trees.

Among the big losers of 2009, European banks, which bought so much toxic securitised sludge, are well represented.

It is even conceivable that this model will join securitised subprime mortgages on the scrap heap.

It was part of a story that all investments in securitised mortgages were safe because those smart people were buying them.

Collapse of demand for some forms of securitised debt made their assets impossible to value, the bank said.

In the US, the slow pace of recovery of the securitised debt markets is still causing headaches for policymakers (see below).

Growing awareness of this disproportionate exposure to systemic risk may reduce investors' appetite for securitised products.

The complexity of structured finance made it difficult to know how losses would cascade down the ladder of investors in securitised assets.

In practical terms there are at least three factors undermining securitised finance.

If this market booms, you can bet your securitised dollar that this is due to exuberance.

Several economists have argued convincingly, for instance, that low policy rates fuelled broader leverage growth in securitised markets.

These, in turn, led to house-price bubbles and huge financial excesses, particularly in securitised assets.

Second, many buyers of securitised products are also likely to be more constrained in future.

After the crisis caused by toxic securitised assets, the financial industry is now hit by another crisis of potentially similar magnitude.

Banks including JP Morgan and Credit Suisse are considering the conversion of life insurance policies into securitised bonds.

Millions of securitised loans were sold to firms all over the world.

Money-market funds, which invested heavily in securitised products, will also be more constrained.

If money-market funds keep the break-the-buck promise, they are likely to move into more liquid asset classes than securitised products.

In Canada, banks continue to hold the mortgages they originate, not using the securitised model that ran into such trouble elsewhere.

Securitised assets using this flawed methodology were used as collateral in other deals, compounding the error.

At its peak, securitised assets stood at less than 2% of the national economy.

So what about the long-term prospects of securitised credit?

"The majority of securitised assets are likely to come back on balance sheet, " Citigroup analysts say in a recent note.

Why does banking generate such turmoil, with the crisis over securitised lending the latest example?

Two of the world's largest investment banks that effectively securitised future aid payments to raise $1bn for immunisation programmes.

But that was before loans were repackaged, securitised and placed in the portfolios of investors everywhere from Atlanta to Zurich.

Like other banks, Morgan Stanley is making cuts in leveraged finance and securitised products.

What do securitised mortgages and manufacturing supply chains have in common?

The private market for securitised mortgage loans remains very subdued.

We are living through the first crisis of our brave new world of securitised financial markets.

There is no innocent explanation for many of the securitised bonds made and sold by investment banks.

The rot started in the market for securitised subprime mortgages.

Banks need to reinvent themselves with healthy, simple, clean products that can be securitised and sold to the world.

Bringing securitised assets back on its balance-sheet will erode Citi's core capital by 1. 4 percentage points.

But whereas the market for other securitised assets, such as car loans, has revived strongly, few expect a rush of new private-label RMBS.

The market for securitised mortgages is dead in the water.

In 2007, for instance, $668 billion of non-traditional mortgages were securitised.

Moreover, they can force the lenders to repurchase securitised loans if they turn sour in their first few months of life.

One is the widespread loss of investor faith in valuations of securitised products.

In recent years some "real money" asset managers, such as pension funds, bought securitised products.

Because of the structure of securitised mortgage finance, this risk has the potential to cause a global financial crisis.

More than half of the credit cards and student loans originated in America in 2007 were securitised.

Such ideas may help at the margins; purchasing securitised bundles of SME loans, for example, seems sensible.

Sixth, what is the future of securitised lending?

In contrast, in America in 2007 the value of outstanding securitised mortgages was about a quarter of GDP.

all manner of debt, from solid company loans to fragile subprime mortgages, can be syndicated or securitised, chopped into bits and sold on;

The chance of losses on securitised products increases as the economy worsens ;