Credit crunch

We consider the factors that contributed to the fall in confidence in the market following the credit crisis. 

The flexibility and wide application of the securitization technique, which were advantageous to banks that employed it, also contributed to its 

PERFORMANCE MEASURE Public Securities Association (PSA) CALCULATION PSA = [CPR/(.2) (months)] 100 TYPICAL ASSET CLASS mortgages, home-equity, student loans 

Constant Prepayment Rate(CPR) 1-(1-SMM)12 mortgages, home-equity, student loans 

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Opportunity Knocks for Big Pharmaceutical Companies in the Credit Crunch, Pharmaceutical Business Review. Available online. URL http //www.pharmaceutical-business-review.com/article feature.asp guid=99C88B49-D9FA-412B-A7D9-8A665404A8A7. Posted October 9, 2008. 

The period 2005 to first half2007 was a period of very high growth for the issuance of CDOs. During this period the growth in the CDO product was investor-driven and high volumes of arbitrage CDO transactions were issued. However, a big impact of the credit crunch from 2007 has been a sharp decline in new issuance of CDO product. 

Since the start of the credit crunch, there has been a sharp decline in the issuance volumes for both ABS CDO and CLO in 2008. FIGURE 16.4 shows issuance by type of underlying collateral, and FIGURE 16.5 is a summary of CDO issuance volumes between 2004 and 2008. 

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