Download or read book Asset Backed Securitization and Financial Stability written by and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Asset-backed securitization (ABS) may contribute to generating instability in financial markets both through an 'inside effect' in the banking system - facilitating progressive deterioration of bank assets' quality - and through an 'outside effect' - favoring credit risk transfer from balance sheets of banks acting as originators to investors in asset-backed securities (ABS). The rating assigned to ABS has the function of indicating to the market the credit risk borne by investors. This depends on the quality of assets and of guarantees lent by originators and by any third-party guarantor, as well as on the trend of macroeconomic determinants which may compromise the capacity of principal debtors to honor their debts.The underlying hypothesis on which this work is based is that rating models do not correctly embody the impact of macroeconomic variables on debtors' solvency, determining a lag in downgrading. In particular, it is considered that any variations in interest rates and GDP have an impact on ABS performances, but that such an impact is not picked up in a timely fashion by rating models. Essentially, in pre-crisis periods, when interest rate increases as well as decreases are recorded in growth rates of GDP, rating assessments fail to register risk increases in ABS securities, only proceeding to downgrade later, when variations in macroeconomic variables have generated negative effects on the flow of ABS funds.We verify this hypothesis specifically with reference to ABS transactions active during the recent financial and economic crisis. We then proceed to test information on ABS rating, assessing it in relation to the timing of downgrading on a sample of transactions which took place between 2000 and 2009. The conclusions reached confirm the theoretical hypothesis, demonstrating that, in the pre-crisis period, when macroeconomic variables suggested the need for a downgrading judgement, agencies delayed downmarking, making the announcement only at a later stage, after the crisis had taken place and the transaction criticalities were already displayed. The chapter is related to the literature analyzing relations between the financial crisis and asset- backed securitization, bringing an innovative contribution to empirical and theoretical studies, aimed at defining an interpretational model for relations between ABS and financial crises.
Download or read book Securitization written by Miguel A. Segoviano Basurto and published by International Monetary Fund. This book was released on 2015-01-26 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.
Download or read book Securitization Past Present and Future written by Solomon Y Deku and published by Springer. This book was released on 2017-08-04 with total page 186 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book aims to explore if and how securitization changed financial intermediation and lending behaviour by reviewing the pre- and post-financial crisis theoretical and empirical literature. The book’s distinctive feature is bringing the growing post-crisis empirical evidence to the attention of a wider audience by critically appraising it against pre-crisis arguments. With its thought-provoking insights, this book is of particular interest for students, practitioners and academics.
Download or read book Securitization written by Miguel A. Segoviano Basurto and published by International Monetary Fund. This book was released on 2013-12-19 with total page 74 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the financial stability implications arising from securitization markets, with one eye on the past and another on the future. The paper begins by deriving a number of “lessons learned” based on an examination of key industry developments in the years before the crisis. Emphasis is placed on the various ways in which securitization markets dramatically changed shape in the years preceding the crisis, vis-à-vis their earlier (simpler) incarnation. Current impediments to securitization markets are then discussed, including a treatment of various regulatory initiatives, the operational infrastructure of securitization markets, and related official sector intervention. Finally, a broad suite of policy recommendations is presented to address the factors that either contributed to the crisis or may currently be posing obstacles to growth-supportive, sustainable securitization markets. These proposals are guided by the objective of preserving the beneficial features of securitization, while mitigating those that pose a potential risk to financial stability.
Download or read book Term Asset Backed Securities Loan Facility written by June Rhee and published by . This book was released on 2016 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the fall of 2008, the securitization market, which was the major provider of credit for consumers and small businesses, came to a near halt. Investors in this market abandoned not only the residential mortgage-backed securities that triggered the financial crisis, but also consumer and business asset-backed securities (ABS), which had a long track record of strong performance, and commercial mortgage-backed securities (CMBS). Also, the unprecedented widening of spreads for these securities rendered new issuance uneconomical, and the shutdown of the securitization market threatened to exacerbate the downturn in the economy.The Federal Reserve (Fed) thus decided to introduce the Term Asset-Backed Securities Loan Facility (TALF) to help stabilize funding markets for issuers in the securitization market. The TALF extended term loans, collateralized by the securities, to buyers of certain high-quality asset-backed securities. By reopening the ABS market, the Fed intended to ultimately support the provision of credit to consumers and small businesses. Preventing the shutdown of lending to consumers and small businesses was the goal. The Fed did not directly take on material credit risk in those loans, but encouraged private investors to do so by providing them with liquidity.In aggregate, the Fed issued 2,152 loans, totaling $71.1 billion. The volume of outstanding loans peaked in March 2010 at $48.2 billion. Loans secured by nonmortgage ABS totaled $59 billion and loans secured by legacy CMBS totaled $12 billion. There are no longer any loans outstanding under the TALF program.
Download or read book Macroeconomic Effects of Risk Retention Requirements written by Timothy F. Geithner and published by DIANE Publishing. This book was released on 2011 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Financial Stability written by Frederick L. Feldkamp and published by John Wiley & Sons. This book was released on 2014-09-04 with total page 220 pages. Available in PDF, EPUB and Kindle. Book excerpt: Applying the Lessons of History to Understanding Fraud Today and Tomorrow Financial Stability provides a roadmap by which the world can anticipate and avoid future financial disruptions. This unique discussion of past and present financial events offers new insights that explain economic, political, and legal antecedents of financial crises in Western markets. With a detailed discussion of the history of finance, this book shows modern investors and finance professionals how to learn from past successes and failures to gauge future market threats. Readers will gain new insight into the antecedents of todays financial markets and the political economy that surrounds them. Armed with this knowledge, they will be able to craft a strategy that steers away from financial disorder and toward maximum stability. Coverage includes discussion of capital, forecasting, and political reaction, and past, present, and future applications within all realms of business. The companion website offers additional data and research, providing a complete resource for those seeking a better understanding of the risk at hand. As the world struggles to emerge from the latest financial crisis, professionals in finance, the law and other disciplines, and the people they advise, are searching for understanding to avoid future crises. Financial Stability argues that the best lessons are learned from our own mistakes, and that the ability to look ahead depends upon our willingness to look back. Readers will: Review the historical laws, practices, and outcomes that shaped the modern day financial markets of the great western economies Understand the theory of financial stability, the roles of law and transparency, and the importance of action to punish fraud in order to prevent future contagion Work through the theoretical proofs in terms of math, law, accounting, economics, philosophy, and international trade Build a strategy for the future with consideration toward needs, sources, balance, and learning from past mistakes Everywhere around the globe, at all points in history, financial crises have always been rooted in the confluence of politics, finance, and law. Financial Stability puts the latest global financial crisis in perspective, highlighting the lessons we have already learned, and those we need to internalize today.
Download or read book The Securitization Markets Handbook written by Charles Austin Stone and published by John Wiley & Sons. This book was released on 2012-09-25 with total page 469 pages. Available in PDF, EPUB and Kindle. Book excerpt: A comprehensive guide to the continuously evolving world of securitization The Second Edition of The Securitization Markets Handbook is a valuable resource for both experienced money managers trying to put a securitization strategy into place as well as newcomers looking to acquire a broad and strong foundation in this discipline. This edition takes a close look at the pre- and post-crash mortgage market and the mortgage-backed securities based on those mortgages, as well as other asset-backed securities including commercial paper or credit cards. The crash of the subprime market and the failure of the asset-backed markets offer an opportunity to learn about banking finance, specifically off-balance sheet finance, and the many costly mistakes that resulted in one of the most severe downturns in financial markets. With this book, you'll discover why certain mortgage and asset-backed securities imploded and others didn't. This new edition examines why the market failed and how the next crisis can be averted or made less severe. It also explains why securitization remains a primary source of capital for the mortgage market, credit card market, home equity market, auto loan market, and segments of the commercial paper market. Offers an informed overview of how the securitization market works, how to make money in it, and what's next for asset- and mortgage-backed securities after the crisis Contains new chapters on CDOs and SIVs, along with a history of the growth and crash of the subprime market, asset-backed securities, and home equity lines of credit Written by securitization experts Charles Stone and Anne Zissu Updated to reflect the current market environment, the Second Edition of The Securitization Markets Handbook offers clear, comprehensive guidance to these complex markets.
Download or read book Regulating Securitized Products written by R. Saleuddin and published by Springer. This book was released on 2015-07-14 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt: Securitization regulation remains, in the eyes of investors, banks, businesses, bureaucrats and politicians, one of the remaining unsolved puzzles of the post-Global Financial Crisis landscape. This book describes the key features of securitization, including the most common structures and their uses as well as the motivations of the participants in these markets. Important historical moments and case studies are frequently used to illustrate critical issues in the design and enforcement of regulation for securitized products. This work is intended to contextualize and contribute to the highly specialized debates between policymakers, regulators and the regulated financial intermediaries, setting out an agenda for discussion as well as providing some strongly held views on possible solutions. Written by an industry insider with over 20 years' experience in the markets, this book considers regulatory tools from all sides while avoiding common biases. It is a valuable source for not only regulators and policymakers, but also educators, students and researchers in financial regulation, financial engineering and investment management.
Download or read book Securitisation written by Stefano Filomeni and published by LAP Lambert Academic Publishing. This book was released on 2011-05 with total page 108 pages. Available in PDF, EPUB and Kindle. Book excerpt: The password of a new concept of finance that has been dominating since the '90s is widely known as securitisation: a technique through which loans are packaged together and then transferred to autonomous special purpose vehicles (SPV) which, in turn, issue asset-backed securities (ABS). These securities, submitted to the rating agencies' evaluation, give rise to a variety of classes of risk and can be issued to a wide audience composed of international investors. In this book, it has been analyzed that securitisation deals, theoretically conceived as instruments of risk management, were used in an aggressive way in order to maximize short-term profit, but with weak valuation of medium and long-term effects. Moreover, it has been demonstrated that securitisation deals had a relevant impact both in provoking and fomenting the recent financial crisis. Due to the increased risk appetite by financial institutions in the years preceding the crisis, securitisation operations contributed to disseminate a situation of uncertainty with a generalized mistrust in the financial markets and in the solvency of financial intermediaries, causing the crisis to reach the global level.
Download or read book Restoring Financial Stability written by New York University Stern School of Business and published by John Wiley & Sons. This book was released on 2009-04-20 with total page 534 pages. Available in PDF, EPUB and Kindle. Book excerpt: An insightful look at how to reform our broken financial system The financial crisis that unfolded in September 2008 transformed the United States and world economies. As each day's headlines brought stories of bank failures and rescues, government policies drawn and redrawn against the backdrop of an historic Presidential election, and solutions that seemed to be discarded almost as soon as they were proposed, a group of thirty-three academics at New York University Stern School of Business began tackling the hard questions behind the headlines. Representing fields of finance, economics, and accounting, these professors-led by Dean Thomas Cooley and Vice Dean Ingo Walter-shaped eighteen independent policy papers that proposed market-focused solutions to the problems within a common framework. In December, with great urgency, they sent hand-bound copies to Washington. Restoring Financial Stability is the culmination of their work. Proposes bold, yet principled approaches-including financial policy alternatives and specific courses of action-to deal with this unprecedented, systemic financial crisis Created by the contributions of various academics from New York University's Stern School of Business Provides important perspectives on both the causes of the global financial crisis as well as proposed solutions to ensure it doesn't happen again Contains detailed evaluations and analyses covering many spectrums of the marketplace Edited by Matthew Richardson and Viral Acharya, this reliable resource brings together the best thinking of finance and economics from the faculty of one of the top universities in world.
Download or read book A Primer on Securitization written by Leon T. Kendall and published by MIT Press. This book was released on 2000 with total page 200 pages. Available in PDF, EPUB and Kindle. Book excerpt: A Primer on Securitization introduces readers to America's newest system of raising capital: what it is, how it operates, and what difference securitization makes. Gathering fourteen lectures by the pioneers of securitization and by current practitioners--from Freddie Mac, Paine Webber, JP Morgan, Chrysler, McKinsey & Co, and other major players-- A Primer on Securitization introduces readers to America's newest system of raising capital: what it is, how it operates, and what difference securitization makes.The securitization process bypasses financial intermediaries that have historically collected deposits and loaned them to those seeking funds, and links borrowers directly to money and capital markets. Although little has been written about what is perhaps one of the most important innovations to emerge in financial markets since the 1930s, securitization has revolutionized the way that the borrowing needs of consumers and businesses are met. Today, for example, over two-thirds of all home loans are being securitized, along with substantial percentages of auto loans and credit card receivables, and the process continues to expand into new fields including synthetic securities. Authoritative and practical, these lectures show how securitization was developed to fill a gap in financial markets. They discuss the nature and causes of the market imperfections that made securitization a valuable source of funds, and describe how securitization has linked local mortgage markets with international capital markets. Readers will gain a broad perspective of the different parties--the borrower, the loan originator, the servicer, the rating agency, the special purpose vehicle, the credit enhancer, the underwriter, and the investor--as well as a detailed analysis of how these parties relate to one another. From the inception of the secondary mortgage market through the collapse of the Granite funds, readers will learn not only about the success but also about the excesses and failures that typically accompany the development of any product in the real or financial sector.
Download or read book Emergency Economic Stabilization Act and Current Financial Turmoil written by Baird Webel and published by DIANE Publishing. This book was released on 2011 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: This is a print on demand edition of a hard to find publication. Contents: (1) Intro.; (2) Troubled Assets Relief Program (TARP): Provisions of TARP: Asset Purchase; Asset Insur.; Program Size; Private Equity and Debt Considerations; Oversight Provisions; Assistance to Homeowners; Exec. Compensation; Mark-to-Market Accounting; Increase in Deposit Insur.; Treasury Actions Since Enactment; Asset Purchase and Insur.; Preferred Share Purchase; Homeowners¿ Assistance; Auto Mfrs.; Consumer Asset-Backed Securities; (3) Potential Causes of Financial Instability; (4) Sources of Current Market Turmoil; Mortgage Defaults, and Asset Prices; Liquidity and Uncertainty; Capital Adequacy and Leverage; (5) Evidence of the Real Effects of Financial Market Turmoil; Tightening Credit Markets. Illus.
Download or read book Asset Backed Securitization and the Financial Crisis written by Nadine Senanayake and published by Diplomica Verlag. This book was released on 2010 with total page 84 pages. Available in PDF, EPUB and Kindle. Book excerpt: The study aims at analyzing the product and market functions of Asset-backed Securities (ABS) by firstly, distinguishing characteristics of the product functions and market functions in relation to Asset-backed Securitization within a general compass. The product functions the author refers to the phase prior to the issuing of securities, namely the structuring phase. Thus, the author will be drawing from history and developments in the market, players involved in the structuring process and descriptions of the basic product functions. Secondly, the author will elaborate on the market functions; the phase subsequent to the product being implemented into the market. Furthermore the author strives to give the reader a clear definition of the types of asset-backed securities and their functions within the market framework. Thirdly, the author will elaborate on the shortfalls in the ABS structure with relation to it's risk and continue to discuss the risks attributable to the product and market functions of ABS. Finally, the author will submit solutions for the featured risks within the framework and draw an outline as to the ABS securitization market in the future. Chapter 1: distinguishes characteristics of the product functions of Asset Backed Securitization, by explaining the key definitions associated with initiating the product phase. Initially the history and development of the ABS market will be unraveled; thereafter the author continues to describe the structure of the ABS process, explained by describing the role played by the key players in the process. Conclusively, the author exemplifies the two main concepts of securitization's product sphere namely, True sale/Conventional and Synthetic Securitization Chapter 2: distinguishes characteristics of the Market functions of Asset Backed Securitization, by explaining the different types of ABS also by giving a short description of each type of asset backed securities, namely, ABS, MBS, and CDO. Furthermore, the a
Download or read book Financial Stability Monitoring written by Tobias Adrian and published by . This book was released on 2020 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In a recently released New York Fed staff report, we present a forward-looking monitoring program to identify and track time-varying sources of systemic risk.
Download or read book Credit Securitization and Monetary Policy written by Mr.Andrea Pescatori and published by International Monetary Fund. This book was released on 2016-03-23 with total page 21 pages. Available in PDF, EPUB and Kindle. Book excerpt: We show evidence that interest rate hikes slowdown loan growth but lead intermediation to migrate from banks’ balance sheets to non-banks via increased securitization activity. As such, higher interest rates have the potential for unintended consequences; raising systemic risk rather than lowering it by pushing more intermediation activity to more weakly regulated sectors. In the past, this increased securitization activity was driven primarily byb private-label securitization. On the other hand, the government sponsored entities like Freddie Mac and Fannie Mae appear to react to higher policy rates by cutting back on their securitization activity but expanding loans to the Federal Home Loan Bank system.
Download or read book Securitization of Credit written by James A. Rosenthal and published by John Wiley & Sons. This book was released on 1991-01-16 with total page 286 pages. Available in PDF, EPUB and Kindle. Book excerpt: The first guide to this new financial trend. Credit securitization (also known as asset securitization) is a financial technology for packaging, underwriting, and selling loans in the form of securities. First used in packaging mortgage loans (as in the case of GNMA and other federally insured mortgage-backed securities), credit securitization has grown rapidly and spread to other forms of credit, including auto loans, student loans, credit-card balances, and so on. This book provides lenders and other financial professionals with clear analyses of many actual credit securitization deals. Includes much information unavailable elsewhere.
