Holistic medicine needed to revive securitisation


In the immediate aftermath of the crisis, it’s possible that those who identified securitisation as a financing model, rather than loan origination practices, as a principal cause of the crisis were all too ready to charge ahead with a multiplicity of regulatory reforms designed to prevent future crises. They were unprepared to see the broader picture. But with the perspective that often comes with the passage of time, it has now become clear that individual measures that target specific concerns may interact in negative ways, and cause the patient more harm than good.

As a financing technique, securitisation permits banks and other financial institutions to recycle capital, and make credit available to consumers. In the US, where the real-estate finance system has not fully recovered, more than 90% of all new residential mortgage originations are government funded or guaranteed. Private funding alternatives are essential. But actual or proposed US and international regulations are making securitisation’s speedy recovery increasingly difficult.

Originally published in International Financial Law Review in the June 2013 issue.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morrison & Foerster LLP | Attorney Advertising

Written by:


Morrison & Foerster LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.

Already signed up? Log in here

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.