Collateralized debt obligations (CDOs) should be allowed to exist in modern financial services. Collateralized debt obligations have worked well in the past and will continue to work in the future. There is no reason to change this since it is working and there will never be a reason until something better comes along.
Yes, collateralized debt obligations should be allowed to exist in modern financial services, because they are very good investments. Investors can look forward to a very high return on these types of investments. Those who are looking for investors for their project or business can find them. It works out for all involved.
CDO's were devised in order to allow certain aspects of the market to function. CDO's were originally backed by some other sort of asset. The problem was not the existance of the CDO, it was the trading of them under fraudulent pretenses that led to the financial crisis. The mortgages were not worth what the bank was selling them as.
These CDO'S seem to be another bubble. They really distorted the free market and allowed people to become greedy. The banks started charging to much for housing and people's credit cards. They are also very complex and is to hard for the average person to follow them. Which is probably why the banks liked them so much.
No, these debt obligations should not be allowed to exist in the modern financial services that we have in place today. These would just cause a whole lot more trouble for people in the financial business, and a lot of people would end up not getting paid back their money.