Presented By:

Mehreen Omer
WizAnos AT MoncAN
P 8anker's old foe Lhe
danger Lhe borrowers
wlll noL repay Lhelr
loans
P Cleverly comblne
esoLerlc flnanclal
lnsLrumenLs
P 8elleved of rlsk bankers
would lend more money
and caplLallsm would
blossom
CHEDlT DEHlVATlVES
P eller agrees Lo
compensaLe Lhe buyer lf a
loan goes lnLo defaulL
P 8ank A sheds some of Lhe
uncerLalnLy relaLed Lo lLs
loan and feels
emboldened Lo make
fresh loans
P 8ank 8 assumes some of
Lhe rlsk buL lmmedlaLely
en[oys Lhe fee lncome
P lL's J-J-"
SECUHlTlZATlON
P 8undled loans sold Lo
penslon funds and oLher
lnvesLors
P 1he orlglnal lenders havlng
offloaded Lhelr loans could
make new ones
P 1he lnvesLors acqulred a sllce
of Lhe loan bundle and lLs
lnLeresL lncome wlLhouL
havlng Lo go Lo Lhe Lrouble of
meeLlng and assesslng Lhe
borrowers
P J-J-agaln
ATAL sTc
P Addlng subprlme
morLgage loans Lo Lhe
derlvaLlvesand
securlLlzaLlon mlx
P When Lhe real esLaLe
bubble bursL ln 2006
and 2007 derlvaLlves
and securlLles Lled Lo
subprlme morLgages
suddenly losL value
oaaYiNc cAmAicN
P eroclous Wall sLreeL
lobbylng campalgn
P ersuaded C Congress
P 8ackoff from regulaLlng
derlvaLlves
P MyLh lnanclers had a
powerful selflnLeresL ln
keeplng one anoLher
honesL
P Morgan alumnl are sLlll
ouL Lhere