RMBS issued since mid 2007 have typically included a serial pay trigger which after certain conditions are met, mainly satisfactory deal performance for several years after issuance, switch the principal payment order from paying tranches in order of seniority to paying all, or most tranches, proportionately to their outstanding amount.
The second relates to wrong investment advice in connection with securitisation products and certificates. More recently, confidence suffered again as information about banks’ misconduct came to light – for example, the manipulation of reference rates such as Euribor and Libor or the legal violations that have often garnered so much attention from the media.