Collateralized Loan Obligations Essay Example | Topics and Well Written Essays - 1750 words

Collateralized Loan Obligations - Essay Example The shareholders look for the assets which give higher yield and the companies take benefit of low borrowing rates. Collateralized mortgage obligations are same as the overflow marketplace of the predetermined product world. Strong trade of obscure products have helped increase investor’s enthusiasm for leveraged mortgages just as the regulators are cautioning about potentially agitated credit markets (Financial times, 2014). The paper aims at providing the nature of collateralized loan obligations and their role during the time of financial crisis. It will also highlight the changes which has taken place in the regulations to prevent the re-occurring of crisis. Further, the reasons behind the latest growth in the collateralized loan obligations market have also been discussed. Bank are gradually more employing securitization structure of a novel asset known as collateralized loan obligation (CLO) in order to fulfil their financial goals. Collateralized loan obligations allow banks to sell part of huge portfolios of the commercial loans directly in the global capital markets. CLOs provide banks a way of attaining a broad choice of financial objectives, comprising the decrease of regulatory capital needs and requirements, access to a proficient funding base for lending activities, accounting treatment of off-balance sheet, as well as increased liquidity (Kohler, 1998). The rationale behind the formation of collateralized loan obligations was to augment the supply of keen business lenders in order to decrease the price of loans/mortgages to companies and to facilitate banks more frequently to instantly sell loans to the external lenders/investors. This will facilitate providing of money to the business clients and therefore earn price or fee with no risk or little risk towards themselves. A collateralized loan obligation is made of various high risk business loans which are grouped together and sliced into diverse sectors which carry dissimilar credit

The Rise of China and the Subsequent Re-Shaping Of Business Essay - 1

The Rise of China and the Subsequent Re-Shaping Of Business Environment for MNEs (Multi-National Enterprises) - Essay Example The researcher states that modern era globalization has taken its present shape due to three primary reasons: technological innovation leading to worldwide networking and integration; global integration of emerging economies of developing countries; and opening up of by previously closed economies of countries like Brazil, India, and China. MNEs (Multinational Enterprises) are the product and the most visible aspect of globalization. A   MNE controls material  production  and/or provides services  to a large number of countries worldwide. MNEs conduct their operation (material production) in one country, which is generally termed as the ‘host country,’ while base their management activities in another country, referred to as the  Ã¢â‚¬Ëœhome country.’ Some of these MNEs are large and powerful, often operating with budgets that are more than the GDP of some of the developing nations in the world. The emergence of MNEs along with globalization is evident w hen we find that during the 1970s there were around 7000 MNEs, which at the turn of the century skyrocketed to around 60000. Around the same time, we find that the world’s largest MNCs and MNE’s (top 1000) accounted for almost 80% of the global industrial production, while the top 100 corporations and enterprises were responsible for 4.3% global GDP. At the core of globalisation and the rise of the MNCs and MNEs, is the emergence of China, as an economic power; and this article will examine the rise of Chinese economy and its particularly good relationship with various MNEs, and the recent break in this ‘good’ relationship leading to re-shaping of business environment for the MNEs in China.