Definition for : Structured Investment Vehicles

"Structured Investment Vehicles" (abbrev. "SIV") are Conduits which are used by financial institutions to generate a Profit by (i) buying a pool of generally medium and long-term Asset-Backed Securities generating in aggregate an excess Margin over (ii) the Cost of the short-term Asset-Backed Commercial paper issued by the SIV. The excess Margin became negative, as a result of the Sub-prime crisis, and many banks had to directly refinance the Conduits they had sponsored, as they were called on their liquidity lines when it became difficult to roll-over the financing in the ABCP Market.
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