An SIV,or structured investment vehicle,is an off-balance-sheet entity that shields a sponsoring institution from risk.What happened to some of these SIVs when they ran into financial problems?
A) The SIV sued the sponsoring institution to pay, in full, all liabilities of the SIV.
B) The SIV still remained off-balance-sheet, but investors did sue sponsoring institutions.
C) Nothing! The SIV status as off-balance-sheet remained, a nice example of a financial structure that worked during the financial crisis.
D) Troubled SIVs became an asset of the sponsoring institution - the off-balance-sheet status was meaningless.
Correct Answer:
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