Origami is the Japanese art of folding paper into intricate andaesthetically attractive shapes. As such, it is the perfectmetaphor for the Wall Street financial engineering model, whichultimately proved to be the underlying cause of the 2008 financialcrisis.
In Financial Origami, Brendan Moynihan describes how the WallStreet business model evolved from a method to transfer risk into amethod for manufacturing risk. Along the way, this timely bookskillfully dissects financial engineering and addresses how it'soften a mechanism to evade regulatory constraints, provideinstitutional investors with customized products, and, of course,generate revenue for financial engineers.
- Reveals how Wall Street's financial engineering business modelmorphed into something destructive
- Highlights how the origami model worked well in thecomparatively stable years of the early 2000s, when there was lessrisk to transfer
- Discusses how Wall Street began manufacturing risk by creatingproducts that multiplied risk exposures and encouraged subprimelending
With the collapse of Lehman Brother the Wall Street businessmodel effectively broke. But there are many lessons to be learnedfrom what has transpired, and Financial Origami will show you whatthey are.