You call them stock, or stock options, derivatives, mortgage backed securities.

Mortgage banks kept some claims on their books, but sold most of them to investment banks as mortgage backed securities. The investment banks blended these securities into asset backed securities and collateralized debt obligations (CDOs) and sold them on to financial institutions throughout the world.

True, major commercial banks, like Citibank and Bank of America, tottered, but they were not at risk because of their securities underwriting for corporate clients or their securities trading divisions, but because of how they (mis)handled mortgage securities. Mortgage lending, however, is a long standing activity for commercial and savings banks, mostly unaffected by Glass Steagall or its repeal.

As a result, mortgage brokers maximize their income by generating larger volumes of mortgages, as do the banks that package these loans into mortgage backed securities (MBS s). Investment banks then earn fees for re packaging these securities in tranches of collateralized debt obligations, or CDO s (and sometimes into CDO s of CDO s).

The prices of US homes are also declining at an accelerating rate, in many areas by more than 10 per year. The prices of traded mortgage backed securities have followed house prices down.

In 2007 2008, this was the case for a class of securities based on residential mortgages in the United States (RMBS, or residential mortgage backed securities). During the boom phase, these securities were sold as risk free, on the assumption that US house prices could not decline, as this had never happened before in peacetime.

And the market is prone to temporary fits of shared enthusiasm for emerging market debt, for Internet stocks, for residential mortgage backed securities, for Greek government debt. Traders need not wait to see when or whether the profits materialize.

Moreover, the boom resulted in a number of financial innovations, which may have been good ideas intrinsically, but which were sometimes applied too aggressively, given the risk of falling prices. Mortgage backed securities were urged onto investors for whom they were too risky.

Some distressed banks clearly possess large quantities of mortgage backed securities, and are holding onto them in the hope that their prices will rise in the future, saving them from failure. At the same time, buyers expect even lower prices down the line.

Even mortgage backed securities, which were at the center of the financial crisis that erupted in 2008, have important uses in spreading home and auto ownership. The problem was not with the innovation, but with how it was used that is, with financiers incentives.

Banks everywhere are learning the hard way that the debt with which the US financed its consumption boom will not necessarily be repaid. The mortgage backed securities that US banks succeeded in selling to the world are not comparable to European assets with similar names.

A clear example is financial regulation, which in many ways is a form of paternalism. In the US, the low risk assigned to senior tranches of mortgage backed securities made them attractive instruments for banks to hold, given the relatively high return they offered.

The ECB has already attempted to ease credit conditions by purchasing high quality asset backed securities. It has bought securities backed by cash flows from private sector mortgages, so called covered bonds, and it has floated the idea of buying corporate bonds and multilateral securities issued by the European Investment Bank.

(4) Deposit banks, designated commercial banks, asset management agencies, security exchanges, securities registration and clearing agencies of a securities firm

CMHC provides mortgage loan insurance to lenders across Canada (including on reserve and in the North) and guarantees timely payment of interest and principal on Mortgage Backed and Canada Mortgage Bond, thereby ensuring a steady source of funds for Canadian home buyers.

When the market boomed, such schemes authors were heralded as geniuses. But when house prices fell and mortgage backed securities (and derivatives based on them) became illiquid, Citigroup took the liabilities back onto its balance sheet and then needed to be rescued through massive, repeated bailouts.

The Federal Reserve s policy of long term asset purchases, also known as quantitative easing, has intentionally kept long term rates low. The Fed is buying Treasury bonds and long term mortgage backed securities at a rate of 85 billion a month, equivalent to an annual rate of 1,020 billion.

Destabilized by too much short term debt and too much exposure to risky, overvalued, low quality mortgage backed securities, they tripped and fell over it. So regulators have focused on command and control orders to financial firms to increase their equity, and to reduce the riskiness of their investments.

(2) expenses on purchasing commercial insurances, securities, stock equities or collections and so on

Not only has the bank just reported its first quarterly loss in more than a decade it has also agreed to a tentative deal to pay a fine of 13 billion to the US government as punishment for mis selling mortgage backed securities. Other big legal and regulatory costs loom.

PARIS JPMorgan Chase has had a bad year. Not only has the bank just reported its first quarterly loss in more than a decade it has also agreed to a tentative deal to pay a fine of 13 billion to the US government as punishment for mis selling mortgage backed securities.

If the banks were ever really held accountable for the social costs of their behavior, the bill would far exceed 300 400 billion. Realistically assessed, the full downside legal risks to financial institutions are in excess of 1 trillion particularly if it can be demonstrated that the mortgage backed securities sold to investors were not backed by mortgages at all, because the proper legal paperwork was never done.

It is no coincidence that this new kind of bank run originated in the US, which is the clearest example of falling home prices in the world today. When home prices stop rising, recent homebuyers may lose the enthusiasm to continue paying their mortgages and investors lose faith in mortgage backed securities.

In the US, the penalties have been dominated by fines for sales of misleadingly marketed mortgage backed securities, often to the two government supported entities Fannie Mae and Freddie Mac. The banks, it would be fair to say, do not wholly accept regulators arguments about that, but they have bitten their tongues and paid up.

That gave the Fed the ability in 2010 to begin its massive monthly purchases of long term bonds and mortgage backed securities. This quantitative easing (QE) allowed the Fed to drive down long term interest rates directly, leading to a rise in the stock market and to a recovery in prices of owner occupied homes.

Similar comments were made about the US Federal Reserve in 2008, after it began large scale purchases of non conventional assets, including agency debt and mortgage backed securities, in order to support the collapsing US housing market. Former Fed Chairman Paul Volcker, for example, complained that the institution was operating at the bounds of legality.

But if you think that the 2 trillion figure is already huge, the latest estimates by my research consultancy RGE Monitor suggest that total losses on loans made by US financial firms and the fall in the market value of the assets they hold (things like mortgage backed securities) will peak at about 3.6 trillion.

Article 50 A securities firm that carries out securities lending and borrowing business shall sign a securities lending and borrowing contract with the customer, and shall open a customer securities guarantee account with the securities registration and settlement organs, and a customer funds guarantee account with the designated commercial bank in the name of the securities firm in accordance with the provisions of the securities regulatory agency under the State Council.

Talks among state officials, the Obama administration, and the banks are currently focused on reported abuses in servicing mortgages, foreclosing on homes, and evicting their residents. But leading banks are also accused of illegal behavior inducing people to borrow, for example, by deceiving them about the interest rate that would actually be paid, while misrepresenting the resulting mortgage backed securities to investors.

QE2, in which the Fed bought long term government bonds, did not have a discernible effect on long term government interest rates. Indeed, with its recent decision to pursue QE3, the Fed is focusing once again on the mortgage backed securities market but, given that the market is much healthier now, it is unclear how much good this will do.

Article 57 Where a securities firm carries out securities brokerage business, its customer s trading settlement funds shall be deposit in the designated commercial bank, and shall be managed separately in the name of each customer.

Similarly, the quantitative easing (QE) that has defined many major central banks monetary policy in recent years does not involve buying or selling foreign assets. Under QE, the Federal Reserve buys and announces that it will buy assets the only difference is that these assets are longer maturity US government debt instruments and mortgage backed securities of various kinds, all denominated in US dollars.

If these were commercial loans, creditors would consider restructuring them extending the payment schedule and typically writing down principal. But, in America s home mortgage market, this is much less common.

Also required to report were those involved in securities brokerage and related activities insurance companies, brokers and agents, commercial casinos and gambling houses and real estate agencies.

An audit would also reveal more details about financial market interventions like those in 2008, when the Fed purchased mortgage securities from Bear Stearns and AIG. The risk here is that providing too much information in real time about the securities that the Fed is buying and the institutions that it is helping could destabilize markets.

Tom Hoenig, a former president of the Federal Reserve Bank of Kansas City and now a top official at the Federal Deposit Insurance Corporation, advocates separating big banks commercial and securities trading activities. The cultures never mesh well, and big securities businesses are notoriously difficult to manage.

Occupy the Mortgage Lenders

The securities firm should sign entrustment contracts with securities brokers who accept such entrustment, issue securities broker certificate, define authorized scope of securities broker and supervise working behavior of securities broker.

Policy enhancements have been made to mortgage portability, second homes and mortgage qualification for self employed borrowers.

The designated commercial bank shall sign a customer trading settlement funds custody contract with the securities firm and its customer, setting forth matters such as the deposit and withdrawal, transfer and enquiries of the trading settlement funds, and shall open a general account of customer trading settlement funds for the securities firm according to the requirements of net amount settlement and delivery versus payment of securities trading.

Its banks and financial institutions were not tempted to buy the mortgage supported securities and credit default swaps that ruined several Western financial institutions. Among the drivers of growth, domestic capital formation retained much of its momentum from preceding years.

Without securities business license, the securities firm and its domestic branch shall not run securities business.

The securities broker should have securities working qualification.

Although the Hong Kong Monetary Authority tightened the lending of the bank to the mortgage borrowers, those who bought properties can also get a high percentage mortgage loan by means of the mortgage insurance, the mortgage loan provided by the developer and so on.

For example, one reform adopted in the US to help prevent the too big to fail problem is the risk retention rule stipulated by the 2010 Dodd Frank Act. In order to ensure that mortgage securitizers have some skin in the game, they are required to retain an interest in 5 of the mortgage securities that they create (unless they qualify for an exemption).