Conduit concerns
Fears about the exposure financial institutions have related to their short-term lending commitments to conduits and special investment vehicles are rising. And Taiwan is drawing a lot of scrutiny. Toby Garrod reports
Participants in Taiwan's asset-backed commercial paper (ABCP) conduit market have never had it easy. The transactions were born out of necessity to resolve the country's bond fund problems - caused by wrongly placed bets on inverse-floater and range-accrual notes - at a time when credit spreads proved to be unsustainably narrow. The highly demanding structures stand as a blemish on Taiwan's financial landscape.
With the arrival of a global reassessment of risk caused by the US subprime crash in
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