kaal:claim:1558614-002

The German ABCP conduit model, which financed long term American mortgage loans with short term paper and pocketed the spread, was profitable only for as long as new buyers for the short term paper could be found, so the model collapsed the moment institutional buyers withdrew.

A signifi- cant downside of this business model, however, was liquidity and re- sale risk—profiting through the spread only worked while the con- duit (i.e. Rhineland Funding) found buyers for the ABCP it issued

Painter and Kaal, Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in (2010), I.A. The Financial Crisis in the United States and Germany, p. 3
https://ssrn.com/abstract=1558614 · source PDF

Painter and Kaal, Initial Reflections on an Evolving Standard Constraints on Risk Taking by Directors and Officers in (2010). SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1558614

• long term assets funded by short term asset backed commercial paper
• sponsor bank provides credit enhancement and liquidity to the conduit

mechanismsupport: evidencedfailure: maturity mismatch funding runfamily: liquidity-and-market-structure-failuredefirisk-and-incentivessystemic-risk

The quote above is an exact substring of the source PDF, whose sha256 is e898211630f4116879329d6de8397523dca5b066864147421aa5cbc7429dc83b. Extraction method: pdf-text-layer.
Attestation record: colloquium/attestations/623b982d2d09ecad...json
Verify the binding yourself: curl -s https://wulfkaal.github.io/claims/1558614-002.md | sha256sum