Mortgages, Credit & Loans Could Help Raise $100 trillion for Developing Countries, Says Milken
|Developing countries could free up trillions of dollars by developing markets based on mortgages, credit cards and loans, according to an outline of a speech at BNP Paribas conference by Michael Milken, the junk bond billionaire turned philanthropist, reports Bloomberg.|
Highlights of Milken's Speech:
- Developing nations could release as much as $20 trillion for investment through securities based on mortgages.
- Financial products linked to loans, bonds and credit cards could help to raise between $50 trillion and $100 trillion.
- Financial innovations have driven every advance of civilization since the development of banking in Mesopotamia 4,000 years ago.
- Health care is also a key to development, Milken says, putting the value of ``human capital'' at $4,000 trillion worldwide.
- Increased life expectancy in the U.S. added $2.6 trillion a year between 1970 and 1998, according to Milken.
Institutions sell about $1 trillion of asset-backed bonds every year, according to the Securities Industry and Financial Markets Association's Web site.
More than $20 trillion of derivatives based on debt known as credit-default swaps are outstanding worldwide, according to Basel, Switzerland-based Bank for International Settlements.
Companies sold a record $151 billion of junk bonds in the U.S. and $48.4 billion in Europe last year, according to data compiled by Bloomberg.