Hello everyone I just started reading through Schwesser 2008 notes for Level 2 and noticed that session 15 describes the benefits of CDOs, ABS etc. and has no info on the drawbacks that became relevant during the recent crisis (e.g. over-reliance on models, massive liquidity risk, underestimation of credit risk and mis-pricing by rating agencies). So I was wondering if the CBOK or the notes in the 2009 version have been adapted in any way, to cover the recent financial crisis and the new lessons learned. Sorry if you all figured this out long time ago. I just started (thinking about) studying and will likely be slow to catch up with the material and any changes. Thanks, Morihei
Check out Chapter-2 in Book 5 2009 (Fixed Income) about Liquidity condurum. That talks about recent crisis.