ABX
Definition
A financial index that tracked the health of subprime mortgage loans through credit derivatives, and became a key indicator of the 2006-07 mortgage market collapse.
Example
Example 1:
Just as Nigeria’s stock market index tells investors how healthy the overall market is, the ABX served the same purpose for America’s subprime mortgage market, when its value crashed in 2006-07, it signaled serious trouble ahead for the entire global economy, including Nigerian banks with foreign exposures.
Example 2:
When major Wall Street firms like Bear Stearns began watching the ABX index drop sharply in 2007, they knew the subprime mortgage market was collapsing,many traders had already used the index to bet against these risky loans and made enormous profits as the market crashed.