Open Access. Powered by Scholars. Published by Universities.®
- Institution
-
- Yale University (94)
- Syracuse University (6)
- University of Kentucky (4)
- The University of San Francisco (3)
- Central Bank of Nigeria (2)
-
- City University of New York (CUNY) (2)
- University of Nevada, Las Vegas (2)
- American University in Cairo (1)
- Association of Arab Universities (1)
- Cleveland State University (1)
- College of the Holy Cross (1)
- Extension Journal Inc (1)
- Kean University (1)
- Old Dominion University (1)
- SIT Graduate Institute/SIT Study Abroad (1)
- Touro University Jacob D. Fuchsberg Law Center (1)
- University of Arkansas, Fayetteville (1)
- University of Dar es Salaam (1)
- University of Louisville (1)
- University of Massachusetts Boston (1)
- Virginia Commonwealth University (1)
- W.E. Upjohn Institute for Employment Research (1)
- Western Michigan University (1)
- Keyword
-
- Global Financial Crisis (19)
- Reserve requirements (14)
- Chrysler (13)
- General Motors (12)
- Global Financial Crisis (GFC) (12)
-
- Blanket guarantee (11)
- Liquidity rules (11)
- Reserve ratio (10)
- Restructuring (10)
- Wall Street (10)
- Collateralized debt obligations (CDOs) (9)
- Subprime CDO (9)
- TARP (8)
- Manufacturing (7)
- Bankrupcty (6)
- Debt-in-possession financing (6)
- Leadership (6)
- Residental mortgage-backed securities (6)
- UAW (6)
- US Auto Taskforce (5)
- Asian Financial Crisis (4)
- Banking crisis (4)
- Derivatives (4)
- ECB (4)
- Government equity investment (4)
- Government guarantee (4)
- Systemic risk (4)
- AIFP (3)
- Auto finance (3)
- Automotive Industry Financing Program (3)
- Publication Year
- Publication
-
- Journal of Financial Crises (94)
- Center for Policy Research (6)
- Theses and Dissertations--Public Policy and Administration (3)
- Dissertations, Theses, and Capstone Projects (2)
- Master's Projects and Capstones (2)
-
- Theses and Dissertations (2)
- An-Najah University Journal for Research - B (Humanities) (1)
- Brookings Scholar Lecture Series (1)
- Bullion (1)
- Capstone Collection (1)
- Center for Social Policy Publications (1)
- Dissertations (1)
- Economic and Financial Review (1)
- Economics Department Working Papers (1)
- Electronic Theses and Dissertations (1)
- Finance Undergraduate Honors Theses (1)
- Higher Education (1)
- Journal of Extension (1)
- Journal of Humanities and Social Sciences (1)
- Presentations (1)
- Scholarly Works (1)
- School of Public Service Theses & Dissertations (1)
- The Downtown Review: An Interdisciplinary Journal Written and Peer-Reviewed by Mandel Honors College Students at Cleveland State University (1)
- Theses and Dissertations--Agricultural Economics (1)
- Undergraduate Honors Theses (1)
- Urban Mayors Policy Center (1)
- Publication Type
Articles 61 - 90 of 129
Full-Text Articles in Finance
Lessons Learned: Eric Kolchinsky, Steven H. Kasoff, Matthew A. Lieber
Lessons Learned: Eric Kolchinsky, Steven H. Kasoff, Matthew A. Lieber
Journal of Financial Crises
Eric Kolchinsky served as managing director of ratings for ABS CDOs (asset-backed security collateralized debt obligations) at Moody’s Investor Services from 2005 to 2007. Kolchinsky started his career in structured finance with stints at Goldman Sachs and Merrill Lynch. He joined Moody’s in 2000 as vice president for credit. In 2007, after Kolchinsky raised questions concerning the ratings of new deals in light of subprime downgrades, Moody’s removed him from his client-facing position. Kolchinsky supervised methodology for structured finance valuations at Moody’s Analytics for two years, before Moody’s suspended him altogether in 2009. Separated from Moody’s, Kolchinsky testified before Congress …
Lessons Learned: Chris Ricciardi, Matthew A. Lieber, Steven H. Kasoff
Lessons Learned: Chris Ricciardi, Matthew A. Lieber, Steven H. Kasoff
Journal of Financial Crises
Chris Ricciardi was a CDO pioneer who built the structured products units at CS First Boston and Merrill Lynch before moving to the asset management side. Ricciardi began his career structuring novel fixed-income securities at Prudential. At CS First Boston and Merrill, he catapulted each investment bank’s lagging unit into the top of the league tables for CDO (collateralized debt obligation) issuance. He was CEO of Cohen & Co. from 2006 to 2011, when he left to co-found investment management firm Mead Park Management. A graduate of the University of Richmond with an MBA from the Wharton School of the …
Lessons Learned: Sohail Khan, Matthew A. Lieber, Steven H. Kasoff
Lessons Learned: Sohail Khan, Matthew A. Lieber, Steven H. Kasoff
Journal of Financial Crises
Sohail Khan was managing director of fixed-income sales at Citigroup from 2005–09. Khan started his finance career in 1996, after completing his MBA at Lahore University of Management Sciences (LUMS). Khan gained broad experience in product structuring and sales of credit derivatives at Citigroup. As managing director during the subprime securitization boom and bust, he was involved with institutional sales of asset-backed securities (ABS) including collateralized debt obligations (CDOs); his clients were hedge funds, structured vehicles, and institutional buyers. In 2009, Khan left Citigroup to co-found StormHarbour Securities, a boutique investment bank he has headed since as managing principal. This …
Lessons Learned: Stephen King, Matthew A. Lieber, Steven H. Kasoff
Lessons Learned: Stephen King, Matthew A. Lieber, Steven H. Kasoff
Journal of Financial Crises
Stephen King started his career in finance at Bankers Trust in 1997 as a computer scientist with a business degree. He worked on structured credit transactions when credit derivatives were just being invented. In 2005, King joined Barclays’ structured credit group, where he managed a CDO (collateralized debt obligation) correlation desk that was different from standard dealer CDO units. In 2009, he launched C12 Capital Management to relieve Barclays of distressed subprime positions. Presently, King finances and builds luxury hotels as founder and CEO of Sardis Developments. This Lessons Learned summary is based on an interview with King.
Lessons Learned: Steven H. Kasoff, Matthew A. Lieber
Lessons Learned: Steven H. Kasoff, Matthew A. Lieber
Journal of Financial Crises
Steve Kasoff was employed at Elliott Management Corporation from 2003 until 2020. His responsibilities centered on developing the structured products and real estate groups at Elliott. He was made senior portfolio manager, a member of the firm’s management committee, and equity partner. Kasoff has extensive experience in the origination, trading, and management of structured products such as collateralized debt obligations (CDOs) and mortgage-backed securities, including earlier posts at Deutsche Bank, Merrill Lynch, and Lehman Brothers. He earned his BA in economics from Yale College and his MBA in finance from the Wharton School of the University of Pennsylvania. In 2016, …
Lessons Learned: James Finkel, Steven H. Kasoff, Matthew A. Lieber
Lessons Learned: James Finkel, Steven H. Kasoff, Matthew A. Lieber
Journal of Financial Crises
A Wall Street veteran specializing in structured credit transactions, Jim Finkel was co-founder and director of the structured credit asset management firm Dynamic Credit Partners (DCP) from 2003 to 2009. Finkel started his career as a securities lawyer for the international law firm Cadwalader, Wickersham & Taft LLP, before moving over to the banking side in 1992. He specialized in mortgage-backed securities and collateralized loan obligations (CLOs) for several firms, including Bear Stearns and Deutsche Bank, where he headed the London-based CLO group. In 2003, Finkel returned to New York to launch and run DCP. In 2010, he joined financial …
A Special Project: Inside The Cdo Machine, Rosalind Z. Wiggins, Andrew Metrick
A Special Project: Inside The Cdo Machine, Rosalind Z. Wiggins, Andrew Metrick
Journal of Financial Crises
In this issue of the Journal of Financial Crisis, we feature Inside the CDO Machine—a special undertaking recently completed under the auspices of the Yale Program on Financial Stability Lessons Learned Oral History Project by Steven H. Kasoff, a Yale School of Management Fellow and former equity partner and head of real estate and structured products investments at the Elliott Management Corp., a global hedge fund. For the project, Kasoff undertook a series of interviews with industry professionals to focus on one of the critical derivatives products of the Global Financial Crisis (GFC), collateralized debt obligations (CDOs), and how they …
Wall Street’S Subprime Debacle: Firsthand Accounts From Inside The Cdo Machine, Matthew A. Lieber, Steven H. Kasoff
Wall Street’S Subprime Debacle: Firsthand Accounts From Inside The Cdo Machine, Matthew A. Lieber, Steven H. Kasoff
Journal of Financial Crises
The observations, perceptions, and actions of participants in the subprime markets remain poorly documented and incompletely understood. Seeking to deepen our understanding, this study has produced seven interview summaries and one article telling the story of a hypothetical CDO deal. This article is organized in four parts. First, it presents our research questions and methods in relation to the existing knowledge on the topic. Second, it describes what we think are the study’s main contributions. Third, it previews the Lessons Learned summaries and interviews from each of the participants. And last, it identifies what we believe are some of the …
Anatomy Of A Trade: The Making Of A Subprime Cdo, Steven H. Kasoff
Anatomy Of A Trade: The Making Of A Subprime Cdo, Steven H. Kasoff
Journal of Financial Crises
This article presents a short story, a sketch in eight parts of a single fictitious subprime collateralized debt obligation (CDO) transaction. The story is informed by expert interviews, documentary research, and the author’s firsthand experience.
The Rescue Of The Us Auto Industry, Module Z:Overview, Rosalind Z. Wiggins, Greg Feldberg, Alexander Nye, Andrew Metrick
The Rescue Of The Us Auto Industry, Module Z:Overview, Rosalind Z. Wiggins, Greg Feldberg, Alexander Nye, Andrew Metrick
Journal of Financial Crises
In the fall of 2008, credit markets tightened amid a broader economic downturn that severely impacted the US auto industry, especially the three largest domestic manufacturers, General Motors (GM), Ford Motors, and Chrysler. The companies requested assistance from the government in a bid to stay afloat, but Congress declined to authorize funding. The Bush administration, however, provided bridge loans to GM and Chrysler under the Auto Industry Finance Program (AIFP), funded through the Troubled Assets Relief Program (TARP), to sustain them until the Obama administration was in place. Within months, the Obama administration decided that a speedy bankruptcy would be …
The Rescue Of The Us Auto Industry, Module G: The Auto Warranty Commitment Program, Benjamin Henken
The Rescue Of The Us Auto Industry, Module G: The Auto Warranty Commitment Program, Benjamin Henken
Journal of Financial Crises
On March 30, 2009, President Barack Obama announced a plan for government-funded protection of warranties on new vehicles sold by General Motors (GM) and Chrysler while the companies underwent restructuring. The initiative, which would become known as the Auto Warranty Commitment Program (AWCP), was intended to bolster consumer confidence by alleviating a major risk—the loss of warranty benefits—to consumers associated with the companies’ potential bankruptcies. Under the AWCP, GM and Chrysler established independent special purpose vehicles (SPVs) to which they transferred a combination of their own money along with funding they received from Treasury in the form of a loan. …
The Rescue Of The Us Auto Industry, Module E: Emergency Assistance For Chrysler Financial, Alexander Nye
The Rescue Of The Us Auto Industry, Module E: Emergency Assistance For Chrysler Financial, Alexander Nye
Journal of Financial Crises
In the fall of 2008, due to the confluence of the Global Financial Crisis and years of structural decline in the auto industry, Chrysler was nearing bankruptcy. Chrysler’s related finance company, Chrysler Financial, was also in dire straits. On December 19, 2008, President Bush announced the Automotive Industry Financing Program and that the US Treasury would extend Chrysler a $4 billion Bridge Loan to give the company time to prepare a viable restructuring plan. Two weeks later, the Treasury arranged $1.5 billion in low-interest financing for Chrysler Financial to fund the securitization of new consumer car loans and the facility …
The Rescue Of The Us Auto Industry, Module F: Auto Supplier Support Program, Riki Matsumoto
The Rescue Of The Us Auto Industry, Module F: Auto Supplier Support Program, Riki Matsumoto
Journal of Financial Crises
The Global Financial Crisis that began in 2007 intensified the decade-long malaise of two of the largest auto manufacturers in the US, General Motors and Chrysler. Their possible collapse was deemed to pose a systemic risk by the United States government. In response, the Department of the Treasury made efforts to provide support to the automotive industry through the Automotive Industry Financing Program (AIFP). As US auto parts suppliers experienced deteriorated automotive markets, disrupted manufacturer operations, and stressed credit markets, the Treasury announced the Auto Supplier Support Program (ASSP) on March 19, 2009, as an auxiliary program to the overall …
The Rescue Of The Us Auto Industry, Module C: Restructuring Chrysler Through Bankruptcy, Alexander Nye
The Rescue Of The Us Auto Industry, Module C: Restructuring Chrysler Through Bankruptcy, Alexander Nye
Journal of Financial Crises
In late 2008, due to the confluence of the financial crisis and years of structural decline in the auto industry, Chrysler was nearing bankruptcy. The US Treasury provided Chrysler’s owner, Chrysler Holding, with a $4 billion bridge loan and Chrysler’s related finance company, Chrysler Financial, with a $1.5 billion financing program under the Troubled Assets Relief Program (TARP). The government-led restructuring through bankruptcy involved the commitment of roughly $5 billion in debtor-in-possession (DIP) loans from the US Treasury and the Canadian government, under which the US Treasury ultimately lent $1.89 billion, using TARP funds, and Canada lent about $1 billion, …
The Rescue Of The Us Auto Industry, Module D: Emergency Assistance To Ally Financial (Formerly Gmac), Riki Matsumoto, Kaleb B. Nygaard
The Rescue Of The Us Auto Industry, Module D: Emergency Assistance To Ally Financial (Formerly Gmac), Riki Matsumoto, Kaleb B. Nygaard
Journal of Financial Crises
In 2008, GMAC was a $200 billion company providing financing to General Motors customers. As the Global Financial Crisis entered a critical stage in early 2008, GMAC’s funding strategy and liquidity position were adversely affected by the significant disruption in credit markets and the broader economic downturn. This reduced access to financing, which impacted GMAC’s ability to provide automotive wholesale inventory and retail financing to General Motors and Chrysler. In late 2008 and early 2009 GM and Chrysler underwent a complex restructuring process. To restore liquidity to GMAC’s auto finance business, the Federal Reserve agreed to expedite GMAC’s conversion to …
The Rescue Of The Us Auto Industry, Module A: Automotive Bridge Loans, Alexander Nye
The Rescue Of The Us Auto Industry, Module A: Automotive Bridge Loans, Alexander Nye
Journal of Financial Crises
In 2008, in the midst of the Global Financial Crisis, America’s Big Three automakers neared their breaking point. Two of them, General Motors (GM) and Chrysler, asked Congress for funding to prevent uncontrolled bankruptcies. Policymakers realized these uncontrolled bankruptcies would damage the manufacturing sector. Congress considered but failed to pass a framework conditioning short-term financing on the companies’ producing acceptable restructuring plans. With the companies warning that they could not survive the coming presidential transition, on December 19, 2008, President George W. Bush announced the Automotive Industry Financing Program (AIFP) under the authority of the Emergency Economic Stability Act (EESA) …
The Rescue Of The Us Auto Industry, Module B: Restructuring General Motors Through Bankruptcy, Kaleb B. Nygaard
The Rescue Of The Us Auto Industry, Module B: Restructuring General Motors Through Bankruptcy, Kaleb B. Nygaard
Journal of Financial Crises
As the Global Financial Crisis worsened in 2008, credit markets tightened and a broader economic downturn developed, hitting the auto industry particularly hard. The crisis intensified a decade-long decline of the largest US auto manufacturers. Because of its size and importance to the economy, the US government decided to provide assistance to General Motors (GM) to sustain it while it developed plans for its long-term viability. Congress declined to authorize funding for the auto manufacturers, but in December 2008, Treasury provided a bridge loan to GM under the Troubled Assets Relief Program (TARP) to sustain the company until the Obama …
Broad-Based Capital Injection Programs, June Rhee, Junko Oguri, Greg Feldberg, Andrew Metrick
Broad-Based Capital Injection Programs, June Rhee, Junko Oguri, Greg Feldberg, Andrew Metrick
Journal of Financial Crises
This paper surveys 36 broad-based capital injection (BBCI) programs and attempts to identify some best (and worst) practices. We argue that it is crucial to distinguish between programs implemented during acute (“panic”) and chronic (“debt overhang”) phases of a crisis, where the goals of program design should be different. In an acute phase, programs should be designed to influence the behavior of bank counterparties, while in chronic phases, the focus should be on bank behavior itself. With this framing, we identify seven themes to guide program design, and provide many illustrative examples for the policymaker’s tool kit.
Hudson Yards: Hybrid Capital's New Home, Massimo D. Scoditti
Hudson Yards: Hybrid Capital's New Home, Massimo D. Scoditti
Dissertations, Theses, and Capstone Projects
This thesis focuses on the material and metaphysical aspects of the Hudson Yards, the largest private development in US History. With its roots in the administration of Michael Bloomberg, the site is representative of neoliberal ideology. It is also one in which cultural production is central. This is in terms of the rationalization and mythos of the building of the space itself and the dreamworlds created to obscure the mechanisms of extraction and accumulation that make such a complex possible. The Hudson Yards is particularly interesting because, as Cindi Katz might suggest, topography lines connect it to transnational capital. And …
Us Community Development Capital Initiative (Cdci), Adam Kulam
Us Community Development Capital Initiative (Cdci), Adam Kulam
Journal of Financial Crises
The United States Department of the Treasury responded to the Global Financial Crisis with an economy-wide stimulus package called the Troubled Assets Relief Program (TARP). Within the portion of TARP’s budget dedicated to bank investments, about $570.1 million was disbursed to community development financial institutions (CDFIs)—specifically, banks and credit unions (depositories)—in a program called the Community Development Capital Initiative (CDCI). Through the CDCI, Treasury provided capital to CDFI depositories, encouraged them to lend to small businesses, and promoted other community-oriented goals. The CDFI depositories issued either preferred shares or unsecured subordinated debentures to Treasury at low (2%) interest rates for …
Turkey Saving Deposit Insurance Fund Bank Recapitalization (2000–2001), Natalie Leonard
Turkey Saving Deposit Insurance Fund Bank Recapitalization (2000–2001), Natalie Leonard
Journal of Financial Crises
Throughout the 1990s, Turkey’s macroeconomy featured high and fluctuating inflation and oscillating GDP growth rates. After Turkey’s April 1999 elections, Turkey adopted a new economic program in coordination with the International Monetary Fund (IMF) with three goals: fiscal adjustment, structural reform, and an exchange rate commitment. By the end of the third quarter of 2000, concerns over the pace of structural reform mounted and short-term interest rates remained high. The new Banking Regulation and Supervision Agency (BRSA) revealed significant corruption within several small banks taken over by the Saving Deposit Insurance Fund (SDIF). In November 2000, Demirbank, a private bank …
Japan’S Act On Strengthening Financial Functions (Asff), Vaasavi Unnava, Junko Oguri
Japan’S Act On Strengthening Financial Functions (Asff), Vaasavi Unnava, Junko Oguri
Journal of Financial Crises
After the Japanese Financial Crisis in 1990s, the non-performing loan problem was mitigated in the large Japanese banks but persisted in the regional banking system. By 2004, regional banks accounted for half of all non-performing loans. In 2004, the government passed the Act on Strengthening Financial Functions (ASFF), legislation for capital injections to address the non-performing loan problem. Aimed at regional banks, the ASFF secured ¥2 trillion in capital, with various eligibility restrictions and requirements, such as a rigorous debt restructuring plan. As the Japanese economy and the financial system encountered multiple external shocks, the government amended the Act several …
Effect Of Public Debt On Private Investment In Nigeria: Evidence From An Asymmetric Dynamic Model, A. B. Abubakar, S. O. Mamman
Effect Of Public Debt On Private Investment In Nigeria: Evidence From An Asymmetric Dynamic Model, A. B. Abubakar, S. O. Mamman
Economic and Financial Review
This study examines the effect of public debt on private investment in Nigeria. The linear and non-linear ARDL models are employed to analyse the series spanning the period 1981 to 2018. The estimation results show that an increase in total debt, external debt, and debt service payment adversely affects private investment, with the effects being symmetric. On the other hand, the effect of domestic debt on private investment is found to be asymmetric. Although a negative shock in domestic debt greatly improves private investment, a positive shock leads to a meagre positive effect on private investment. This finding indicates that …
Budgetary Obstacles To Police Reform: The Case Of San Francisco, Hayden Anderson
Budgetary Obstacles To Police Reform: The Case Of San Francisco, Hayden Anderson
Master's Projects and Capstones
In response to the murder of George Floyd in May 2020, the Black Lives Matter movement issued a statement calling on cities to Defund the Police. The event sparked a nationwide reckoning that has reshaped the narratives and strategies for remedying the racial bias and police brutality apparent in the criminal justice system. The shift in police reform efforts embraces notions guiding police budgeting decisions. Today's advocates are transforming their approach to police reform to include budgeting decisions by promoting a municipal practice known as police budget reform. This Capstone explores the feasibility of successful police budget reform under current …
Affordable Housing In San Francisco: A Historical Analysis Of Its Finances And Policies, Ricky H. Tran
Affordable Housing In San Francisco: A Historical Analysis Of Its Finances And Policies, Ricky H. Tran
Master's Projects and Capstones
The affordable housing crisis is not new to San Francisco. As it has been made clear several times, The Bay Area continues to face a crisis of a massive wealth disparity as housing prices continue to rise as incomes for the top earners have risen dramatically since 1999. In San Francisco, rents and housing prices are one of the highest in the nation, and people are facing rent burdens, in which a large portion of their income goes to rent, as for those with low and extremely low income are facing severe rent burdens, which take up more than 50% …
Extension-Led Demonstration: Grameen Microfinance Methods And Capital Access For Low-Income Female Entrepreneurs, Mark A. Edelman
Extension-Led Demonstration: Grameen Microfinance Methods And Capital Access For Low-Income Female Entrepreneurs, Mark A. Edelman
Journal of Extension
A nonprofit community development financial institution and Extension collaborated to conduct a demonstration project to evaluate efficacy of Grameen peer-group microfinance methodology in addressing barriers faced by low-income women entrepreneurs in a small metro area. Program performance metrics achieved by 284 culturally diverse, low-income entrepreneurs (almost all women) over 5 years included a program loan repayment rate of 99%, increased average client income, bank savings accumulation, and increased opportunities for improved credit scores. Client survey responses indicated program methods developed confidence and skills in finances, leadership, and teamwork. Extension professionals may play various roles in such endeavors.
Lessons Learned: Zachary Taylor, Maryann Haggerty
Lessons Learned: Zachary Taylor, Maryann Haggerty
Journal of Financial Crises
Zachary Taylor joined the Federal Reserve Bank of New York (FRBNY) in January 2009 to lead the team responsible for managing and unwinding the central bank’s Maiden Lane II and III portfolios, which were acquired in connection with the intervention to assist American International Group (AIG). Taylor later took over responsibility for the Maiden Lane portfolio consisting of former Bear Stearns assets as well as the unwinding of the Term Asset-Backed Securities Loan Facility (TALF), another crisis-era program. All told, those portfolios amounted to more than $140 billion in residential mortgage-backed securities (RMBS), collateralized debt obligations (CDO), credit default …
Lessons Learned: Alejandro Latorre, Maryann Haggerty
Lessons Learned: Alejandro Latorre, Maryann Haggerty
Journal of Financial Crises
At the time of the 2007-09 global financial crisis, Alejandro Latorre was an assistant vice president at the Federal Reserve Bank of New York (FRBNY). He was active in the bailout of American International Group (AIG) from its inception to the end, when AIG repaid its outstanding obligations to both the Federal Reserve and the U.S. Treasury. This Lessons Learned summary is based on a Feb. 26, 2020, interview. He emphasized that the views discussed here are his own, not the views of anyone else currently or previously within the Federal Reserve System or the views of his current employer.
Lessons Learned: Sarah Dahlgren, Alec Buchholtz, Rosalind Z. Wiggins
Lessons Learned: Sarah Dahlgren, Alec Buchholtz, Rosalind Z. Wiggins
Journal of Financial Crises
Sarah Dahlgren was the Executive Vice President and head of the Financial Institution Supervision Group at the Federal Reserve Bank of New York (FRBNY) during the crisis and instrumental in the rescue of American International Group (AIG). This Lessons Learned summary is drawn from a March 22, 2018, interview in which she gave her take on how central bankers can prepare for future crises.
The Rescue Of American International Group Module E: Maiden Lane Iii, Lily S. Engbith, Devyn Jeffereis
The Rescue Of American International Group Module E: Maiden Lane Iii, Lily S. Engbith, Devyn Jeffereis
Journal of Financial Crises
Starting in mid-2007, American International Group (AIG) faced increasing collateral calls from counterparties looking to protect their positions in credit default swap (CDS) contracts that AIG had written on residential and commercial collateralized debt obligations (CDOs) (US COP 2010, 28-30). Per these agreements, the AIG parent company was responsible for insuring the value of the CDOs against the risk of a negative credit event, such as default (GAO 2011, 5; US COP 2010, 29-30). AIG’s immediate need for liquidity on September 16, largely driven by a securities lending program and those collateral calls, prompted the Federal Reserve to lend the …