SIV (structured investment vehicle)

Structured investment vehicles (or SIVs) are typically created by investment banks and can be a way to raise capital without having to record an associated obligation to repay it.

Structured investment vehicles (or SIVs) are typically created by investment banks and can be a way to achieve 'off balance-sheet finance'- raising capital without having to record an associated obligation to repay it.

For example, after the retail arm of a big bank has issued $100m of mortgages to homeowners, the investment banking division might create and sell $100m of IOUs called 'mortgage backed securities' to an SIV- a separate company - for cash.

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