Super SIV 101

How the SIV crisis erupted and why Wall Street firms are leading a rescue effort.

A safe way to turn a buck
A safe way to turn a buck
The first structured investment vehicle, or SIV, was created in 1988, and others quickly followed.

SIVs issued debt in the commercial paper market, a short-term financing market. Then they used the proceeds to buy higher-yielding, long-term assets, such as mortgage-backed securities.

The strategy worked as long as money market fund managers and others bought the commercial paper - which was generally considered a safe investment.


SIVs created

Red flag

Turmoil hits

Danger lurks

Superfund

Doubts grow