Securitization: The Road Ahead

By Miguel A. Segoviano, Bradley Jones, Peter Lindner, Johannes Blankenheim

January 26, 2015

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Miguel A. Segoviano, Bradley Jones, Peter Lindner, and Johannes Blankenheim. Securitization: The Road Ahead, (USA: International Monetary Fund, 2015) accessed November 21, 2024

Disclaimer: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Summary

The discussion in this note seeks to preserve the beneficial features of securitization while mitigating those that may pose risks to financial stability. A comprehensive set of reforms—targeting both supply- and demand-side inefficiencies—will be needed to put securitization back on a sound, growth-supportive footing. The note departs from others in proposing a broad suite of principles applicable to various elements of the financial intermediation chain. After indentifying where policy makers have already made progress, we then propose measures to address remaining impediments to the rehabilitation of securitization markets. We also encourage more consistent industry standards for the classification of risk (albeit applied at a granular rather than overarching level). Finally, we introduce various initiatives that could aid in fostering the development of a diversified non-bank investor base for securitization in Europe.

Subject: Credit ratings, Financial institutions, Financial services, Loans, Money, Mortgages, Securities, Securitization

Keywords: Aggregate risk label, Asset-backed securities, Bank, Capital, Capital charge, Capital requirement, Cliff effect, Collaterized mortgage obligation, Credit rating agencies, Credit ratings, EU economy, Europe, Finance, Financial Instruments, Global, Global financial crisis, Institutional investors, Intermediation, Investment banking, Loans, Mortgage, Mortgage loan, Mortgage-backed securities, Mortgages, Prepayment risk, Rating, Regulation, Risk weight, SDN, Securities, Securitization, Securitization market, Securitizations

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Staff Discussion Notes No. 2015/001
Stock No:

SDNEA2015001
ISBN:

9781498368285
ISSN:

2617-6750

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