Some analysts claim that the “super-boom” was no longer controllable as the new products became complicated and those responsible could not calculate risks any longer but started depending only on risks management techniques in banks. More so, the rating agencies depended on the data given by synthetic products’ originators, which was a shocking abandonment of responsibility. With the effects having affected the financial institutions to date, traditional lenders are registering fewer borrowers having tightened their loaning terms & conditions. Potential investors are getting back to stock loans. Equities First is a leader in the sector where the Founder & CEO (Al Christy) has verified of the increasing trend of stock-based credit borrowers.
More so, conflicts of interests between institutional clients and professional investment managers combined with a world glut within investment capital caused bad investments by over-pricing of credit assets by asset managers. Usually, professional investment managers are compensated according to clients’ assets volume under management. Thus, asset managers have an incentive to increase their assets they control with the aim of optimizing their compensation. The global investment capital glut caused the credit assets’ yields to decline leaving asset managers with the decision of putting resources in assets despite the returns not reflecting the actual credit risk or getting back funds to clients. However, majority of asset managers proceeded to invest client money in under-yielding (over-priced) investments, to their clients’ detriment, in order to sustain the assets under management. The asset managers supported that decision with the plausible deniability of the risks related with subprime-based credit assets since the loss encounter with early vintage of subprime loans was minimal. The aftermaths of financial crisis is still felt in many banks with many borrowers who suffer the associated consequences opting for stock-loans which are affordable and easy to acquire and learn more about Equities First.