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Securitisation, the Financial Crisis and the Need for Effective Risk Retention

Published online by Cambridge University Press:  28 March 2013

Orkun Akseli
Orkun Akseli*
Affiliation:
Senior Lecturer in Commercial Law, Durham University. I would like thank Mathias Siems and the participants in the staff seminar at Durham University Law School for invaluable comments on an earlier draft. The usual disclaimers apply.
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Abstract

Securitisation is an important financing technique. Following the financial crisis, reform activities in relation to pitfalls of securitisation have been underway. In particular, following the financial crisis, a significant debate has raged globally about whether risk retention mechanisms before the crisis were effective. The idea is to align the incentives of originators/securitisers and investors in order to prevent the negative impact caused by the originate-to-distribute model. If the effective risk retention and due diligence goals are achieved, securitisation may continue to deliver its benefits to investors, and the full implementation of the reforms in the EU and the USA will act as a deterrent and inject confidence in the markets.

Keywords

securitisationrisk retentionincentivesIOSCOCredit Requirements Directive Article 122aSEC Act s.15G
Type
Articles
Information
European Business Organization Law Review (EBOR) , Volume 14 , Issue 1 , March 2013 , pp. 1 - 27
Copyright
Copyright © T.M.C. Asser Press and the Authors 2013

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