The commercial mortgage-backed security(CMBS) is one of the great financial success stories of the 2000s.
Combining features of two other very successful innovations - the residential MBS- the CMBS has evolved rapidly in the face of changing market co...
The commercial mortgage-backed security(CMBS) is one of the great financial success stories of the 2000s.
Combining features of two other very successful innovations - the residential MBS- the CMBS has evolved rapidly in the face of changing market conditions.
This article has considered the efficiency trade-offs associated with the development of the conduit-CMBS market. On balance, there are several factors that favor its continued growth, including liquidity provision, cost reduction through loan product specialization, and value creation archived through cash flow splitting.
Hence if market conditions become even more favorable for the security, look for the conduits to begin to compete aggressively for institutional grade products as well.