Structured Finance and Its Effects on Macroeconomic Stability

<p>The tools and techniques of structured finance have changed banking remarkably over the past twenty years. This area grew to become larger than the sum total of traditional banking deposits in 2007. Despite this, the field is poorly understood and its connection to macroeconomic stability was underestimated until the credit crisis. This paper explores the structured finance market in three phases. First, the market is broken into parts based on the incentives and motivations of each of the three major agents in the field. Next, a critical review of pricing models that are used to justify the valuations of the products of structured finance is discussed using actual market data. Finally, the connection between structured finance and the real economy is explored. It is the conclusion of this paper that structured finance can increase economic efficiency, but thus far the risks that its employment create are greater than their benefit.</p>

Name thesis:degree_name

M.A.

Level thesis:degree_level

Masters Thesis

Year dc:date.available

2011

Author dc:creator

• Fahey, Brian Charles

Contributors dc:contributor

• Tracy Mott, Ph.D.
• Markus Schneider
• Chip Reichardt
• Robert Urquhart

• Collateralized debt obligations
• Credit default swap
• Efficient Market Theory
• Structured finance
• Economics
• Finance

Statement dc:rights

• <p>Copyright is held by the author. User is responsible for all copyright compliance.<strong></strong></p>

Language dc:language

en

Repository record dc:identifier

https://digitalcommons.du.edu/etd/804

OAI identifier oai:identifier

oai:digitalcommons.du.edu:etd-1803