But in the case of Orange County, says Tanya Beder of Capital Market Risk Advisers, which investigated the affair, the financial products involved were fairly straightforward.
But it still takes on some market risk, for which it needs some capital.
These buyers and sellers also include ticket brokers, who as market makers put their own capital at risk over the course of the long and sometimes winding, sports seasons.
We have conducted investor landscape reviews to support the growing interest of the capital market, and most importantly we have always had an eye toward how to leverage our risk capital beyond our own commitments.
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That's where LFL's new owners come in, getting into the growing market of litigation funding - that is, raising risk capital with the prospect of a big share of eventual pay-outs.
Bottom-fishers such as GE Capital have entered the market for high-risk mortgage debt.
Market makers traders who put their capital at risk to provide bids and offers are increasingly being replaced by order-matching systems.
The proposals from Britain's Vickers Commission go a long way to deal with this, dividing a tightly regulated domestic banking system (the bit that puts taxpayers at risk) from a more freewheeling international market for global capital.
Pillar 1 breaks up regulatory capital into three parts, to match credit risk, market risk and operational risk.
There are statutory changes that could be made to allow, for example, a stock market for charity, wherein investors could earn returns on revenue streams that their risk capital makes possible, and even trade on related futures.
That is, the interest rate on Argentinean short-term paper, or the price of the peso on the forward market, reflects the risk of a surprise devaluation that will cost you a chunk of your capital.
"Investors have been very, very quick to reallocate risk back to emerging markets, " said Koon Chow, emerging-market director at Barclays Capital in London.
By taking these securities off the open market, the Fed inhibits the capital markets from fulfilling their function of appropriately pricing and dispersing risk.
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These are to be repaid with interest through a levy on sales, but the governments share some of the commercial risk, so Airbus is getting capital more cheaply than it might on the open market.
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