General Instructions
• Submissions via email or late submissions will not be accepted.
• Make sure your work is clear, well‑structured, and includes your complete details on the cover page.
• Plagiarism or use of AI-generated content will result in a grade of zero.
Activity: Practical Application
Over the years, the banking industry found a lot of enthusiasm to shift from buy-and-hold to originate-to-distribute (OTD) business model. Initially banking industry got the benefit of this model, however, in 2007-2009 the model fails. Securitization itself isn’t inherently flawed—it’s a powerful tool for liquidity and risk distribution. But in the subprime crisis, it became a mechanism for risk obfuscation and regulatory arbitrage, with devastating consequences.
Write a report (1000-1200 words) on pros and cons of originate-to-distribute (OTD) business model and critically examine role of securitization in subprime crisis focusing on following points.
1.Part A: What is the originate-to-distribute (OTD) business model?
2.Part B: Discuss why the banking industry found a lot of enthusiasm to adopt this method?
3.Part C: What Went Wrong with the Securitization of Subprime mortgage?
4.Part D: Critically examine role of Securitization in subprime crisis.
Exception: If a group consists of three members, Part D may be omitted. The main conclusions should be briefly summarized in the final paragraph of the report. This adjustment will not affect grading, as the remaining sections cover all essential components of the project.
Group Assignment Guidelines
This is a group assignment consisting of four students per group. Each student is responsible for completing one of the four parts above. After all members finish their individual sections, the group must cooperate and integrate the content into a single cohesive report that includes an introduction, the four body sections, and a conclusion. Each student should ensure their part is unique, avoids duplication, and complements the contributions of their group members.
Presentation Guidelines
Each group will deliver a short presentation (up to 12 minutes) summarizing their report and key findings.
Four marks will be allocated for the overall quality, organization, and clarity of the presentation.
Three marks will be awarded based on each student’s ability to clearly explain their own section and respond to questions related to it.
Three marks will be awarded for each student’s understanding of the other sections prepared by group members, including the introduction and conclusion, demonstrated through answering related questions.
Note: Slides used during the presentation should be included as images at the end of the report.
Total: 10 marks for the written report + 10 marks for the presentation (20 marks overall).