What to Look for in Securitization Regulation in 2011

Originally published March 30, 2011

Keywords: securitization regulation, adopted reforms, off-balance sheet, OBS, FDIC, FASB

One result of the economic crisis has been a massive federal regulation of the US financial markets, particularly in the securitization market. But does this federal action appropriately address the dark side of securitization or does it paint with too wide a brush? We examine whether already adopted reforms are likely to accomplish their allotted tasks or instead deprive our economy of the values of securitization.

Introduction: Securitization, its Value and Risks

Niall Ferguson, in his latest book, The Ascent of Money: A Financial History of the World, wrote that the substantial increase in Western Civilization's standard of living since the Middle Ages has as much to do with the provision of credit within economies as with the constant improvement of scientific technology. That is, the technology of finance has been as important as