--- title: "Meaning & Key Takeaway of: I think what we need is better…" description: "\"I think what we need is better understanding of how to do risk analysis of a CDO, but that they still can perform a very valuable function because they..." image: "https://sms4smile.com/quotes/i/87e/robert-f-engle-23929_amount_i-think-what-we-need-is-better-understan_435540.jpg" --- # I think what we need is better understanding of how to do… ![“I think what we need is better understanding of how to do risk analysis of a CDO, but that they still can perform a very valuable function because they can aggregate these risks and pass them around so that mortgages or other kinds of loans can be packaged and sold to investors all over the world…” quote by Robert F. Engle](https://sms4smile.com/quotes/i/87e/robert-f-engle-23929_amount_i-think-what-we-need-is-better-understan_435540.jpg) [Download](https://sms4smile.com/quotes/i/87e/robert-f-engle-23929_amount_i-think-what-we-need-is-better-understan_435540.jpg) [Open image](https://sms4smile.com/quotes/i/87e/robert-f-engle-23929_amount_i-think-what-we-need-is-better-understan_435540.jpg) > “I think what we need is better understanding of how to do risk analysis of a CDO, but that they still can perform a very valuable function because they can aggregate these risks and pass them around so that mortgages or other kinds of loans can be packaged and sold to investors all over the world, who in most times, would justify a small amount of each one.” [Robert F. Engle](https://sms4smile.com/quotes/author/robert-f-engle/) ## About This Quote This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation. Risk analysis of complex financial products can be valuable when it aggregates and distributes risk, enabling broader investment opportunities. **In simple terms:** Aggregating risk lets many investors share small portions of many loans. Key Takeaway Use risk analysis to spread risk responsibly. Themes finance risk management investment structuring Mood analytical cautious Type explanatory technical When to use this quote - banking - investment funds - mortgage markets - regulatory review Key Concepts credit risk securitization systemic risk Questions to Reflect On - How does risk aggregation affect financial stability? - What safeguards can prevent misuse of risk pooling? A Different Perspective Risk aggregation can mask underlying vulnerabilities and create systemic exposure. ★ ★ ★ ★ ★ No ratings yet [Analysis](https://sms4smile.com/quotes/about/analysis/) [Customer](https://sms4smile.com/quotes/about/customer/) [Investing](https://sms4smile.com/quotes/about/investing/) [Investors](https://sms4smile.com/quotes/about/investors/) [Learning](https://sms4smile.com/quotes/about/learning/) [Risk](https://sms4smile.com/quotes/about/risk/) [Thinking](https://sms4smile.com/quotes/about/thinking/) [Understanding](https://sms4smile.com/quotes/about/understanding/) [World](https://sms4smile.com/quotes/about/world/) ## Related quotes > [“Here’s the key to understanding risk: it’s largely a matter of opinion. It’s hard to be definitive about risk, even after the fact. 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