What Are Leveraged Loans?

Published: 2021-06-29 06:58:16
essay essay

Category: Business

Type of paper: Essay

This essay has been submitted by a student. This is not an example of the work written by our professional essay writers.

Hey! We can write a custom essay for you.

All possible types of assignments. Written by academics

Many academics and policymakers think that asset prices have deviated significantly from
"fundamental values" and that this deviation is part of the problem affecting financial
institutions. For example, if mortgage and credit assets, which banks hold in plenty, are
currently priced below "fundamental values," then banks will be assessed larger losses than
they otherwise would. This in turn can lead to binding bank capital requirements, concerns over
banks defaulting, etc.
But, what is fundamental value, and how can one make these sorts of statement? The notion
that one can accurately assess fundamental value on the most toxic mortgage-backed securities
should be rightly treated with some suspicion. However, there is considerable evidence that
arbitrage forces, which we normally take to be the key enforcer of fundamental value
relationships, are not present in today's environment. This is circumstantial evidence for

Warning! This essay is not original. Get 100% unique essay within 45 seconds!


We can write your paper just for 11.99$

i want to copy...

This essay has been submitted by a student and contain not unique content

People also read