@article {Cordell10, author = {Larry Cordell and Greg Feldberg and Danielle Sass}, title = {The Role of ABS CDOs in the Financial Crisis}, volume = {25}, number = {2}, pages = {10--27}, year = {2019}, doi = {10.3905/jsf.2019.1.072}, publisher = {Institutional Investor Journals Umbrella}, abstract = {We examine the role of asset-backed security collateralized debt obligations (ABS CDOs) as a primary catalyst for the financial crisis. We show how ABS CDOs became the main investment vehicle for the riskiest investment-grade securities in the private-label mortgage market. We estimate a final tally of writedowns on ABS CDOs, $410 billion in total, with $325 billion assumed by AAA and {\textquotedblleft}super-senior{\textquotedblright} securities, which had minimal capital, margin, or liquidity requirements. Pre-crisis regulations allowed excessive leverage at some firms investing in these securities, imperiling their solvency and placing them at the center of the financial crisis.TOPICS: Asset-backed securities (ABS), credit risk management, financial crises and financial market history}, issn = {1551-9783}, URL = {https://jsf.pm-research.com/content/25/2/10}, eprint = {https://jsf.pm-research.com/content/25/2/10.full.pdf}, journal = {The Journal of Structured Finance} }