Mortgages, Credit & Loans Could Help Raise $100 trillion for Developing Countries, Says Milken

$4,000 Trillion
Value of "Human Capital" Worldwide

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.

Credit Markets:

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. 

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