Net par outstanding trillion
Structured finance = $2.2 trillion Public finance = $1.3 trillion
62% of which 38% of which
U.S. mortgage-
backed securities 19%
Other 11%
International other asset-backed securities 19%
International mortgage-
backed securities
Other 11%
International other asset-backed securities 19%
Source: Association of Financial Guaranty Insurers.
Other 28%
Transporation revenue 8%
U.S. other asset-backed securities 45%
Other 28%
Transporation revenue 8%
General obligation
Tax-backed revenue
General obligation
Utility revenue
Source: Association of Financial Guaranty Insurers.
The case of home mortgages that are securitized by private-label issuers is different. Instead of receiving real or implied government backing, these securities have typically been guaranteed by monoline insurers (so called because they provide insurance coverage only for securities available in the capital market). In 2006, these monoline insurance firms had insured $543 billion in mortgage-backed securities worldwide, which represented 25 percent of their total guarantees (see Figure 2.18). The deterioration in the value of mortgage-backed securities in 2007 and 2008 raised concerns about their ability to honor their guarantees for not only these securities but also for municipal and other securities.
Although securitization initially involved only home mortgage loans, it has spread to many other types of loans, including automobile, home equity, and credit card loans. Total outstanding securities backed by various assets more than doubled from $4.2 trillion in 1999 to $10.1 trillion in the second quarter of 2008. The share of securities backed by assets other than home mortgages increased by 5 percentage points over the same period, from 21 to 26 percent (see Figure 2.19 and Appendix Figure A.6).
Figure 2.19 Growth and Shares of Outstanding Securities Backed by Various Assets (Selected Years)
1999, total = $4.2 trillion Q2 2008, total = $10.1 trillion
Home Student equityn
Credit card 6%
Automobile
Private-label-backed mortgage pools 9%
loans 1%
Other 8%
Home Student equityn
loans 1%
Other 8%
Credit card 6%
Automobile
Agency-and GSE-
backed mortgage pools 70%
Home equity
Credit card
Automobile
Private-label-backed mortgage pools 13%
Student Other loans 11%
Home equity
Student Other loans 11%
Credit card
Sources: Securities Industry and Financial Markets Association, Milken Institute. Note: Agency refers to Ginnie Mae; GSE refers to Fannie Mae and Freddie Mac.
Agency-and GSE-
backed mortgage pools 61%
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