Currencies Could See Wild Swings if Sluggish Progress Breaks CLO Market
TALKING POINTS – CLO, FINANCIAL RISK, GLOBAL GROWTH
- What are collateralized mortgage obligations (CLOs)?
- Do they pose a threat to the worldwide monetary system?
- How would FX markets react to CLO meltdown?
See our free information to discover ways to use economic news in your trading strategy!
The IMF, central banks and politicians have warned concerning the proliferation of collateralized mortgage obligations (CLOs) and the risk they pose to the worldwide monetary system. Foreign money markets could also be battered by breakneck volatility if a slowdown in international financial progress triggers a collapse on this fragile market.
WHAT ARE COLLATERALIZED LOAN OBLIGATIONS (CLOs)?
Collateralized mortgage obligations (CLOs) are a structured credit score instrument, just like a collateralized debt obligation (CDO), the notorious monetary instrument on the middle of the Nice Recession in 2008. Just like CDOs, it entails the method of securitizing varied debt obligations after which redistributing the money flows to all…