Results tagged “FAS 167” from Regulating Wall Street

The Future of Securitization

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by Joshua Ronen and Marti Subrahmanyam

The recently proposed Senate Banking Committee bill requires ". . . any securitizer to retain an economic interest in a material portion of the credit risk for any asset that the securitizer . . . transfers, sales, or conveys to a third party" without the ability of hedging the retained interest. The retained interest is generally required to be at least 5% of the credit risk of the transferred assets with few exceptions. A somewhat similar provision is contained in the House Bill. How will this requirement affect the access to loans by consumers and investors?

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The Dodd-Frank Act, signed into law in July 2010, represented the most significant and controversial overhaul of the U.S. financial regulatory system since the Great Depression. Forty NYU Stern faculty, including editors Viral V. Acharya, Thomas F. Cooley, Matthew P. Richardson, and Ingo Walter, provide a definitive analysis of the Act, expose key flaws and propose solutions to inform the rules’ adoption by regulators, in a new book, Regulating Wall Street: The Dodd-Frank Act and the New Architecture of Global Finance (Wiley, November 2010).

About Restoring Financial Stability

Previously, many of these faculty developed 18 independent policy papers offering market-focused solutions to the financial crisis, which were published in a book, Restoring Financial Stability: How to Repair a Failed System (Wiley, March 2009).

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