How are professional investment managers compensated?
on the volume of client assets under management
what effect does this have?
led to bad investments
did they feel pressure to grow the assets under their control?
yes
who did they have a conflict of interest with?
their clients
what decision did they have to make when profits from credit assets went down?
choice of either investing in assets where returns did not reflect true credit risk or returning funds to clients
which did many of them choose?
to continue to invest client funds in over-priced investments
did this benefit their clientele?
No
what effect did too much global investment capital have?
caused the yields on credit assets to decline
was the danger with subprime mortgages considered high?
No
what could they have done instead of investing the client's money?
return funds to clients