Wall Street Creating CLOs That May Bypass Rules: Credit Markets

[Banjo]

(Bloomberg) -- Wall Street has another rule it’s trying to get around: regulations seeking to limit risk-taking by managers of collateralized loan obligations.

Doing God's work. Yet another gift of smoke and mirrors from the predators to the prey.

http://www.bloomberg.com/news/artic...ng-clos-that-will-bypass-rules-credit-markets

 

[jtrader33]

Another ignorant rule by congress that will hurt the economy. CLOs are cash products - nothing like the synthetics that blew up during the crisis. The decrease in issuance will keep a lot of money from flowing into loan market; an excellent way to hamper economic growth. Plus, one could argue that requiring asset managers to hold equity will actually be an incentive for them to increase risk in the rest of the structure, not reduce it. This makes about as much sense as the transaction tax.