Fancy a change of scene?
Maybe you could help Goldman Sachs build its monoline business!
Goldman helpfully provides an explanation of what monolines do, and why that’s so appealing to them:
A financial guarantee (FG) is an insurance policy on a security or other financial instrument which pays out if the security doesn’t perform. Its like a Credit Default Swap in that respect, but with two key differences (a) it’s against a particular financial instrument rather than against an entity (b) you can only purchase the policy if you have an insurable interest. In other words, there are no “naked shorts” with an FG.
Goldman declined to comment but as Tracy Alloway notes in her story, it could be an appealing line of business, as regulators make noises about tightening up the rules around CDS. More from the advert:
Monoline insurance companies specialize in financial guarantees. They issue these polices both directly, and as a wrapping on a bond at issuance. Part of the reason this is a potentially interesting opportunity is that the monolines are bust or close to bust. Goldman would use one of our insurance entities to issue these.
And finally, the timing is fabulous.
Jobs: Securities Division, FICC, Flow Credit Strats Financial Guarantees, VP – Google cache
Cutting out the muni middle man – FT Alphaville
Death throes of the monolines – FT Alphaville