Securitization: Lessons Learned and the Road Ahead

Title Securitization: Lessons Learned and the Road Ahead
Author Name Miguel Segoviano, Bradley Jones, Peter Lindner, and Johannes Blankenheim
Link http://www.imf.org/external/pubs/ft/wp/2013/wp13255.pdf


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.

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