DBC 2436 - CDO Squared

 

The Banking Tutor 

                Daily Banking Concept -  2436

 CDO-squared

 

A collateralized debt obligation squared (CDO-squared) is a highly complex, high-risk financial product structured as a special purpose vehicle (SPV) that invests in tranches of other CDOs rather than directly in bonds or loans. They amplify risk through a double layer of securitization, often resulting in severe losses when underlying assets, such as subprime mortgages, default.