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2020-05-15

In a replay of 2008, toxic subprime loans could worsen this financial crisis

To enhance investor returns, CLOs have introduced higher levels of leverage and complex risk. 

While banks are required to hold capital of up to 16% against their loan exposure, CLOs, which are not regulated, hold significantly less. This increases leverage, generating potentially higher returns for shareholders.

Satyajit Das MarketWatch May 14, 2020 



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