notices - See details
Notices
Bridge over ocean
1 September 2009 Financial Analysts Journal Volume 65, Issue 5

Transparency through Financial Claims with “Fingerprints”: A Mechanism for Preventing Financial Crises

Helmut Gründl and Thomas Post

Lack of transparency in securitization transactions contributed significantly to the current global financial crisis. This article proposes an incentive-compatible mechanism for future securitization transactions that would increase transparency: financial claims with “fingerprints.” This mechanism would allow market participants at each stage of the securitization process to easily obtain full information about the underlying original risks and the superior claims that need to be satisfied before receiving their own payoffs. The mechanism would considerably enhance transparency in securitization transactions at the expense of some transaction costs.

Read the Complete Article in Financial Analysts Journal Financial Analysts Journal CFA Institute Premium Member Content
This is available to the following CFA Institute membership classes: CFA charterholders, Professionals, and Affiliates.