Cameron, who was head of the investment bank and has agreed not to work in the City again, admitted to FSA investigators that he did not know how the complex loans structures linked to sub-prime mortgages – which eventually caused losses for RBS – worked.
The diversity of mortgage loans, structures (tranches), and investment strategies, has allowed for a broad assortment of mortgage hedge funds.
But the industry's growth has been accompanied by complaints from consumer advocates and state regulators about deceptive sales practices and home equity loans structured in ways that, they say, increase the likelihood of default and foreclosure.
The IFC's investment services consist of loans, equity, trade finance, syndicated loans, structured and securitized finance, client risk management services, treasury services, and liquidity management.
Its core mobilization, which consists of participation and parallel loans, structured finance, its Asset Management Company funds, and other initiatives, grew from $5.38 billion in 2010 to $6.47 billion in 2011.
In June 2006 RBS decided to launch a big push into complex US loan structures linked to sub-prime mortgages.
"There were concerns that there were arrangements in place that enabled other external entities to generate a profit out of certain loan structures or other financial arrangements that the schools had in place," the education minister said.
Johnny Cameron, the former head of Royal Bank of Scotland's investment banking division, has admitted he did not know how billions of pounds of complex loan structures linked to US sub-prime mortgages worked – despite pushing his staff to expand aggressively into this area.
Wall Street executives with knowledge of the loan structures, who were not authorized to speak on the record, suggested that some banks have not moved the loans outside of the broker-dealer because doing so might draw regulatory scrutiny and would require these banks to rewrite thousands of client contracts.
This has allowed multiple new distinctions to be made amongst the creditworthy, as scores get attached to different interest rates and loan structures.
As of late, loan structures and syndication have become so ridiculous that any number of minute stake holders could act as blockers against a logical move for both the majority of the lenders in a given loan and the developers themselves.
