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FIN42210

Academic Year 2024/2025

Structured Finance (FIN42210)

Subject:
Finance
College:
Business
School:
Business
Level:
4 (Masters)
Credits:
7.5
Module Coordinator:
Dr Kevin (Yong Kyu) Gam
Trimester:
Summer
Mode of Delivery:
On Campus
Internship Module:
No
How will I be graded?
Letter grades

Curricular information is subject to change.

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.

About this Module

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 Hours:
Student Effort Type Hours
Lectures

24
Practical

6
Autonomous Student Learning

124
Total

154

Approaches to Teaching and Learning:
The teaching and learning approach adopted emphasises the importance of applying a consistent analytical framework to the different deal types to access their potential to achieve the desired outcomes. The focus will be on understanding the mechanics of the structures including documentation reviews and the theoretical underpinnings for structuring the deals and calculating credit enhancement levels. This will then be applied to case studies of real deals where we will critically assess how the structures performed, did they perform as expected or if not, what faults were evident and could they have been foreseen.

In-class discussions will be encouraged especially in relation to some of the more well-known case studies such as Enron, Bowie Bonds, the Big Short. There will also be a focus on Irish structured finance deals, where appropriate, and how these relate to the real economy.

Requirements, Exclusions and Recommendations

Not applicable to this module.


Module Requisites and Incompatibles
Not applicable to this module.
 

Assessment Strategy
Description Timing Component Scale Must Pass Component % of Final Grade In Module Component Repeat Offered

Not yet recorded.

Carry forward of passed components
Yes
 

Remediation Type Remediation Timing
In-Module Resit Prior to relevant Programme Exam Board
Please see Student Jargon Buster for more information about remediation types and timing. 

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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