FIN42210 Structured Finance

Academic Year 2022/2023

Although there is no universally accepted definition of structured finance, it is generally accepted as any instrument which is structured to cover funding, liquidity, or risk transfer. This course focuses on securitisation, structured credit (credit default swaps, collateralised debt obligations, credit-linked notes, structured credit indices) and other secured funding structures. It involves complex structures, many of which have been misused and were widely viewed as a key trigger of the Global Financial Crisis (2007-9) as illustrated in the “The Big Short”. These structures usually involve the use of a Special Purpose Vehicle (SPV) and tend to be collateralised or reference a specific pool of assets. Despite the negative publicity, global regulators, in particular, have recognised their importance to the real economy and consequently, this was one of the first capital markets areas reformed after the crisis to ensure that they would be more robust and contribute to real economic growth.

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Curricular information is subject to change

Learning Outcomes:

On completing this module, you will be able to:
1) Understand the mechanics of securitisation, structured credit and other secured funding structures.
2) Identify the risks inherent in complex structured financial instruments and be able to access structural risks, credit risks associated with collateral and counterparty risk.
3) Understand the roles of the different market participants including regulators, originators/issuers, rating agencies and investment banks and structurers.
4) Describe the role of structured finance in underpinning real economic growth as well as the flaws which contributed to the 2007-08 global financial crisis and how they were remedied.
5) Have an in-depth discussion with market practitioners on the current state of the structured finance market and have views on its future direction.

Indicative Module Content:

1. Introduction to structured finance
2. Interest Rates & Credit Derivatives
3. Securitisation
4. Synthetic Securitisation
5. Different Synthetic Securitisation Structure
6. Credit Linked Notes
7. Secured Funding Structures

Student Effort Type Hours
Lectures

24

Practical

6

Autonomous Student Learning

124

Total

154

Requirements, Exclusions and Recommendations

Not applicable to this module.


Module Requisites and Incompatibles
Not applicable to this module.
 
Assessment Strategy  
Description Timing Open Book Exam Component Scale Must Pass Component % of Final Grade
Group Project: A Group Presentation on a topic assigned/agreed with the lecturer Unspecified n/a Graded No

15

Examination: Final Examination Unspecified No Graded No

50

Group Project: A Group Report on the topic assigned/agreed with the lecturer Unspecified n/a Graded No

35


Carry forward of passed components
Yes
 
Remediation Type Remediation Timing
In-Module Resit Prior to relevant Programme Exam Board
Feedback Strategy/Strategies

• Feedback individually to students, on an activity or draft prior to summative assessment
• Feedback individually to students, post-assessment
• Group/class feedback, post-assessment

How will my Feedback be Delivered?

Not yet recorded.

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