Structured Finance

When you're just depositing your paycheck every two weeks and paying your rent, utilities bills, and Netflix charges every month, you don't have much call for structured finance. But when you're managing a multinational conglomerate with businesses in dozens of different tax jurisdictions, each with multi-layer risk assessments...well, at that point, structured finance comes in handy.

The term refers to complicated financial structures put into place to manage things like debt and risk. It combines specialties like law and accounting to produce corporate structures that are best suited to maximize the situation for the parent corporation. It can include things like off-balance sheet accounting. This tactic involves creating subsidiaries and shell companies to move debt off the main company's books.

It might also involve the heavy use of financial instruments: options, futures contracts, or other investments meant to hedge risk or provide a way to profit off accumulated cash.