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Chart of the Day: The eurozone as a CDO

If the eurozone crisis reminds you of 2007 when the collapse in the US sub-prime housing market led to billions being wiped off banks' balance sheets, then Credit Suisse has re-imagined a new 'financial product' to bring back those memories

If the eurozone crisis reminds you of 2007 when the collapse in the US sub-prime housing market led to billions being wiped off banks' balance sheets, then Credit Suisse has re-imagined a new 'financial product' to bring back those memories. It has created this chart to illustrate what a eurozone collateralised debt obligation would look like.

A CDO of course packages up residential or commercial mortgages into one financial product, which can then be sliced into different layers - rated by agencies on how risky each tranche is - before each tranche gets sold off to investors according to their risk-profile.

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