Customer Quote by Robert F. Engle
“The collateralized debt obligation, the CDO, is a structure which allows you to more or less continuously choose how much risk you want to take in a whole batch of securities. And the reason why they got us into so much trouble is that it's hard to figure out how much risk you really are taking.”
About This Quote
Source Speech: Financial Markets Conference, 2008
CDOs let investors pick risk levels across many assets, but their complexity hides true exposure.
In simple terms: CDOs mask real risk.
Key Takeaway
Simplify and scrutinize structured products.
Themes
finance
risk management
complexity
Mood
cautious
critical
Type
financial
educational
When to use this quote
- portfolio construction
- regulatory review
- risk assessment
- investment education
Key Concepts
derivatives
systemic risk
valuation uncertainty
Questions to Reflect On
- What safeguards can improve transparency?
- How to balance innovation with risk control?
A Different Perspective
Complex models can be opaque and misleading.
