Despite being one of the fastest growing parts of the capital markets in Europe, the term CDO remains utterly alien to many finance professionals. Its mere mention is virtually guaranteed to make eyes glaze over. The full term, 'collateralised debt obligation', ranks up there with 'bank-to-bank bilateral repo' and 'credit default swap'.

As is often the case in capital markets, bankers have simply come up with a term to try and make them sound clever. The actual concept behind the impenetrable jargon is very simple - borrow low, lend high.