In a world without credit derivatives, investors in real-estate or asset-backed securities had two options: either buy particular pools of collateral or not buy them. Shorting a position or buying protection was out of the question.
These limitations were overcome by mid-2005 when investors welcomed the birth of credit default swaps on asset-backed securities (ABCDS).
These new synthetic instruments acted as credit default swaps on individual home equity issues in the market not previously ava
The week on Risk.net, March 10-16 2018Receive this by email