JP Morgan Chase & Co. and Goldman Sachs Group Inc. develop a new generation of derivatives, after this type of instruments led to the financial crisis in 2008
JP Morgan offers investors swaps, index-linked iBoxx USD Liquid Leverage Loan, levels calculated Markit.
This indicator serves as a benchmark for the market leveraged loan – syndicated loans, provided by financial institutions and investors to companies experiencing significant pressure of debt.
By convention, the investor pays the commission and upon the expiration of the contract receives the income from higher index.
These swaps will help investors to significantly increase profits, as they have an opportunity to bid on a large pool of bonds with little maintenance.
Meanwhile, Goldman Sachs intends to dispose of the first structured bonds in the amount of 1 billion euros, confirm details Standard & Poor’s.
Bonds, which are supposed to be posted in the next month, provided replenished pool of assets in fixed income, including indebtedness secured by other assets.
These tools economists Societe Generale correlate with kollateralizovannymi bonds (CDO), the issue of which provoked a boom in the American housing market in crisis.
These securities are secured by portfolios of risky loans, often had the highest rating of “AAA”. A similar rating, apparently, will have and bonds, which intends to place the Goldman Sachs, economists say.