A Brief Timeline of Securitization
March 25, 2010    Disclosures    POSTED IN  Markets

1970 – U.S. Department of Housing and Urban Development creates a mortgage backed security (mortgage pass-through) sold through GNMA

1983 – Salomon Brothers – First CMO created for Freddie Mac

1985 – Securitization of automobile loans (Originated by Marine Midland Bank and securitized in 1985 by the Certificate for Automobile Receivables Trust, CARS, 1985-1)

1986 – First ABS. Bank credit card sale – private placement of $50 billion of outstanding bank card loans

1986 – Salomon Brothers – First mortgage derivative

1987 – Drexel Burnham – First mezzanine CDO (for Imperial Savings Association)

1990 – Credit Suisse First BostonFirst CLO

1995 – U.S. Congress creates the Student Loan Marketing Association (Sallie Mae) as a government sponsored enterprise to purchase student loans in the secondary market and to securitize pools of student loans

1997 – First public securitization of Community Reinvestment Act (CRA) loans

1997 – First modern credit default swaps invented by JPMorgan Chase (first CDS involved JPMorgan selling the credit risk of Exxon to the European Bank of Reconstruction and Development)

1997 – JP MorganFirst synthetic CDO (Bistro deal)

1999 – Gramm-Leach-Bliley Act – Also known as the Financial Services Modernization Act of 1999 repeals part of the Glass-Steagall Act of 1933. Investment banks now allowed to combine with commercial banks and/or insurance companies

2000 – Commodity Futures Modernization Act of 2000 (Credit default swaps largely are exempt from regulation by the SEC)

2000 – Credit Suisse – First mortgage backed CDO

2001 – David X. Li introduces the Gaussian copula models, which allow for the rapid pricing of CDOs

2000-2009 Global Issuance of CDOs

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