What's in a NAME?

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Accept your election with your Maker first, the rest might fall easily into place.

Can you expand on this Accept your election with your Maker first, the rest might fall easily into place topic a little further?

Under the Volcker Rule. The ultimate success of the final rule will depend on how well the implementing agencies supervise and enforce the rule. While the Federal Reserve's supervisory role will be less than that of the Office of the Comptroller of the Currency and the SEC, we will continue to work with the other implementing agencies to develop an effective and consistent supervisory framework and to ensure that the Volcker Rule is implemented in a manner that upholds the aims of the statute, while not jeopardizing important activities such as market making and hedging. In pursuit of this goal, shortly after the adoption of the Volcker Rule, the Federal Reserve and the other implementing agencies agreed to create an interagency working group, which has already begun to meet. In mid-January, the five implementing agencies approved an interim final rule to permit banking entities to retain interests in certain collateralized debt obligations backed primarily by trust preferred securities that would otherwise be subject to the Volcker Rule's covered fund investment prohibitions.

Isn't a collateralized debt obligation a pool of future payment promises. Bank lends money to 1,000 car buyers and receives an average of $300 from each borrower every month, the title of each car would naturally have a lien, allowing the bank to seize the vehicle if the borrower fails to make monthly payments.

[The car title would also have a lien if purchase with FRN's. same as anything.]

Should the bank need urgent cash, it can contact a large investor with money, such as a mutual fund, and promise to pass on all payments from car buyer for the next year to this institution, in exchange for an immediate lump sum payment.

This arrangement is a collateralized debt obligation, because the promise of the bank to the mutual fund is backed up by the vehicles, which are the collateral in this case.

This is interesting.

The issuer of a CDO—usually a special purpose entity—is typically is a corporation established outside the United States to avoid being subject to U.S. federal income taxation on its global income. These corporations must restrict their activities to avoid U.S. tax; corporations that are deemed to engage in trade or business in the U.S. will be subject to federal taxation.

Foreign corporations that only invest in and hold portfolios of U.S. stock and debt securities are not. Investing, unlike trading or dealing, is not considered to be a trade or business, regardless of its volume or frequency.

Investopedia explains.