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Structured investment vehicle (SIV)

An investment company spun off from a bank or a similar financial institution, intended to profit by borrowing money cheaply and then buying securities such as mortgage-backed bonds, and more complex instruments such as collateralized debt obligations, that pay higher rates of interest. SIVs became a problem during the credit crunch in 2007, when the value of the securities in SIVs dropped.

Reference: Oxford Press Dictonary of Economics, 5th edt.