International Monetary Fund

IMFSurvey Magazine: What readers say

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Goal Is Efficient Credit Delivery, Not Just Profit

Wanted: new, workable framework for securitization that delivers credit and credit investment efficiently (photo: Stan Honda/AFP/Getty Images)

RESTARTING SECURITIZATION MARKETS

Goal Is Efficient Credit Delivery, Not Just Profit

October 13, 2009

Dear IMF Survey:

I read only Chapter 2—“Restarting Securitization Markets: Policy Proposals and Pitfalls”—of the latest Global Financial Stability Report (GFSR), but this article is by far the best I have read (and, I suppose, agrees with my own thoughts the most) on creating a new, workable framework for securitization.

I like covered bonds, and always have, but U.S. firms that benefit most from the complexity of thousands of deals and tens of thousands of tranches seem to forget that the purpose of the exercise is to deliver credit and credit investment efficiently, not just to make profit for intermediaries. 

In fact, there are so many good ideas in this piece that it should be required reading for every G-20 participant and pundit.

So where’s your leverage to get this implemented?

Robert Kent
SF Solutions, LLC
New York City, United States


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The IMF Survey welcomes comments, suggestions, and brief readers' letters, a selection of which are posted under What readers say. Letters may be edited. Please address Internet correspondence to imfsurvey@imf.org.