Counter-argument: Synthetic CDOs were good

There is a theory that the pre-crisis mortgage bubble would have been worse in the absence of synthetic collateralized debt obligations on mortgage-backed securities: If banks didn’t have synthetic CDOs to sell to investors who wanted mortgage exposure, they’d have had to originate even more risky mortgages.

Governance, Advisers and Derivatives, January 26, 2017 at 12:02AM