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10 – The Origins of Asset Backed Securities (ABS) – Part III

In the Part I and Part II of the origins of ABS, it’s shown: The difference between traditional banks that practiced deposit financing and shadow banks that practice market financing. ABS, MBS, CDS, CDO, ABCP are liabilities issued by shadow banks such as SPVs to raise fund from investors to acquire different types of assets.Continue reading “10 – The Origins of Asset Backed Securities (ABS) – Part III”

9 – The Origins of Asset Backed Securities (ABS) – Part II

In the last article we have seen how the shadow banks finance their acquisition of assets via market financing (or securitization) as compared to deposit financing practiced by commercial banks. Before we start, remember: All financial institutions raise funds to acquire assets by issuing their liabilities. Commercial banks raise fund finance the acquisition of assetsContinue reading “9 – The Origins of Asset Backed Securities (ABS) – Part II”

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