Well, haven’t we all learnt a lot over the past few weeks or have we? It’s all so damn confusing.
The credit acronyms seem to be multiplying by the day; the banks are entering slash and burn mode; and it already feels like the biggest come-down around unless you’re for arriving back at Gatwick after a month in Ibiza.
So take stock with the FT Alphaville weekend credit quiz – otherwise known as Name that Acronym, or the Wheel of Diminishing Fortunes.
Next week: Subprime Sudoku.
An off-balance sheet financing vehicle, using funding in the short-term market to invest in a broad range of assets and with no long-term committed capital but a 100 per cent liquidity line is:
a) a SIV
b) a conduit
c) a SIV-lite
d) a glaring liability
You have money tied up in a vehicle in which at least half the collateral is concentrated in subprime RMBS and is sourced primarily in the US. This is most likely to be:
a) a CDO or SIV-lite
b) an arbitrage conduit
c) a SIV
d) idiotic
A SIV-lite tends to have:
a) a bank sponsor
b) substantial liquidity lines
c) a well-diversified portfolio
d) naff all, or NOTA
ABCP is best known as:
a) American Board of Cardiovascular Perfusion
b) Asian Buddhist Conference for Peace
c) Asset Backed Commercial Paper
d) A song by the Jackson Five, isn’t it?
You are a US subprime mortgage borrower. Which acronym best describes your financial situation:
a) NINJA
b) NIP NINJA
c) FUBAR
d) AOTA
HEL is:
a) other people
b) the ruler of the Norse underworld
c) a mortgage
d) the current market with a typo
As the head of structured credit for a global bank you have been the golden boy of the organisation for the past few years creating the much sought after Sivvi D-lite vehicle. But times are tough, compliance is crawling all over your department and your bonus has spontaneously evaporated. You are most likely to:
a) Take an immediate holiday and hope that no one mentions your name and Nick Leeson’s in the same sentence.
b) Decide that, actually, 33 is a fine age at which to retire. No one will suspect a thing.
c) Cry.
d) Tough it out. This is cutting-edge financial innovation, baby. Always going to be a few bumps – and you’re confident your employer will back you all the way. After all, think of all the lovely fees you’ve made them. Right?