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An Introduction to the Federal Reserve System
An Introduction to the Federal Reserve System

BB SBA Financing Solution Sheet
BB SBA Financing Solution Sheet

Notes to Consolidated Financial Statements
Notes to Consolidated Financial Statements

Access to Refinancing and Mortgage Interest Rates
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... their homes (LTV 95). In all, an estimated 30 percent of mortgage borrowers did not have sufficient equity to refinance their loans in the beginning of 2010 (CoreLogic, 2013). Mounting job losses during the Great Recession put a further dent into household ability to refinance mortgages as lenders w ...
Incorporation of financial ratios into prudential definition of assets
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... Asset classification systems require banks to segregate financial assets into risk buckets according to credit risk characteristics. The prudent segregation of assets by credit quality is vital for estimating related expected and unexpected credit losses and assessing if a bank’s capital level adequ ...
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Vanguard`s framework for constructing globally diversified portfolios
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... consideration when determining one’s strategic asset allocation. For example, the hypothetical investor described earlier, who is saving for retirement with a 4% real RRR, should select an asset mix that meets or exceeds that amount, with an acceptable corresponding risk of potential loss. If either ...
Chapter Thirteen: Term Structure of Interest Rates
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...  If the investor expects the 1-year interest rate 4 years from now to exceed 10%, he can make a speculative profit by selling 5-year bonds, and investing the funds in 4-year bonds. After 4 years, invest the payoff at the 1-year interest rate.  If the investor’s expectations turned out true, a prof ...
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... paid to you today. This notion is true because you could invest the dollar in a savings account that earns interest and have more than a dollar in one year. • The term present value (PV) can be extended to mean the PV of a single cash flow or the sum of a sequence or group of cash flows. ...
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Turning a Blind Eye: Wall Street Finance of Predatory Lending
Turning a Blind Eye: Wall Street Finance of Predatory Lending

... Balloon clauses in those loans raised borrowers' risk of foreclosure by an additional fifty percent." Securitization also exacts significant tolls on municipalities by fueling predatory lending. When borrowers, saddled with onerous loan payments, lose or cannot maintain their homes, cities must cont ...
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... colleagues, issuers and investors. Some markets (notably in the US) may operate in ways different to those outlined here. 2. Bookrunners of new bond issues seek to ensure transactions are executed as smoothly and as efficiently as possible, whilst meeting the issuer’s size, pricing and distribution ...
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... survive the hard times and are likely to lead the rebound of their industries when supply/demand conditions improve. The Bankable Deal strategy takes an in-depth look at the current assets and cash flow of a company to reveal value that is not reflected in the stock’s price. ...
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... has remained underserved for a longtime and therefore filled by the Microfinance institutions (Coetzee et al, 2003). The fomial sector has been unwilling to provide credit to MSEs because the clients from this sector are largely poor, lacking in normal securities that can be used as collateral in co ...
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... The EMI and the NCBs will assess existing systems and their links against these standards. This will enable the EMI to compile a list of SSSs to be used for central bank credit operations, which will be published by the ECB. If an SSS does not meet the requirements of the standards the former may be ...
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... competition means they are lowering their yield requirements just to be able to buy something. The second reason is that interest rates have generally trended lower. The rates we’re tracking combine fixed, variable, and seller financing rates actually secured on sales. These rates have averaged less ...
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... The check drawn on the US bank is a ST liability on Swiss residents. It is recorded with a positive sign in the ST liabilities account. 12) The Luxembourg government issues 100,000 dollars worth of long term bonds denominated in euros at an interest rate of 5%. US residents purchase 50% of the issue ...
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... any income. It does not add to the productive assets of the country. For Eg. debts utilised for transfer payments in form of subsidies, old age pension, special incentives to weaker sections etc. Unproductive public loans are a net burden on the community. The government will have to resort to addit ...
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Securitization

Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations (or other non-debt assets which generate receivables) and selling their related cash flows to third party investors as securities, which may be described as bonds, pass-through securities, or collateralized debt obligations (CDOs). Investors are repaid from the principal and interest cash flows collected from the underlying debt and redistributed through the capital structure of the new financing. Securities backed by mortgage receivables are called mortgage-backed securities (MBS), while those backed by other types of receivables are asset-backed securities (ABS).Critics have suggested that the complexity inherent in securitization can limit investors' ability to monitor risk, and that competitive securitization markets with multiple securitizers may be particularly prone to sharp declines in underwriting standards. Private, competitive mortgage securitization is believed to have played an important role in the U.S. subprime mortgage crisis.In addition, off-balance sheet treatment for securitizations coupled with guarantees from the issuer can hide the extent of leverage of the securitizing firm, thereby facilitating risky capital structures and leading to an under-pricing of credit risk. Off-balance sheet securitizations are believed to have played a large role in the high leverage level of U.S. financial institutions before the financial crisis, and the need for bailouts.The granularity of pools of securitized assets can mitigate the credit risk of individual borrowers. Unlike general corporate debt, the credit quality of securitized debt is non-stationary due to changes in volatility that are time- and structure-dependent. If the transaction is properly structured and the pool performs as expected, the credit risk of all tranches of structured debt improves; if improperly structured, the affected tranches may experience dramatic credit deterioration and loss.Securitization has evolved from its beginnings in the late 18th century to an estimated outstanding of $10.24 trillion in the United States and $2.25 trillion in Europe as of the 2nd quarter of 2008. In 2007, ABS issuance amounted to $3.455 trillion in the US and $652 billion in Europe. WBS (Whole Business Securitization) arrangements first appeared in the United Kingdom in the 1990s, and became common in various Commonwealth legal systems where senior creditors of an insolvent business effectively gain the right to control the company.
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