'There is one nuance which is exercising a few wise souls.This is the impact of a large market downturn on the burgeoning commercial mortgage-backed securities market.'These securities are a way for the debt used to buy portfolios to be diced up, spreading an original lender's risk and allowing others to gain exposure to the original property debt. 'If it all goes wrong, though, could the hundreds of banks nowin CMBSsbe herded into place to allow debt restructuring across the board? 'Could portfolios backed by these securities be broken up and sold off?' This column from 3 March 2006 has a ghastly resonance this week. The crises gripping Bradford & Bingley, HBOS, Ireland's banks, Hypo, Fortis and Glitnir were all triggered by clever financial instruments backed by apparently solid real estate. So what happens next?
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