Structured finance products show no signs of becoming simpler, so learning how to define these instruments is equally as important as understanding how to get the best value out of them.
The following roundtable discussion focused on the final statement on the complex structured finance transactions (CSFTs) of financial institutions. Issued on Jan. 5, the interagency statement focuses on an institution's policies for identifying CSFTs and their elevated risks. It also looks at the firms' risk management policies. The statement identifies three steps that financial institutions need to take in order to adequately manage risk: the identification, due diligence, and approval processes for elevated risk; documentation; and general risk management principles for elevated risk CSFTs.