The BIS Quarterly Review is divided into two parts. The first presents an overview of recent developments in financial markets while the second presents special feature articles on, for instance, the future of securitisation.
The BIS Quarterly Review is divided into two parts. The first presents an overview of recent developments in financial markets, before turning in more detail to highlights from the latest BIS data on international banking and financial activity. The second part presents four special feature articles: the first is on the future of securitisation; the second on central counterparties for over-the-counter derivatives; the third on the cost of equity for global banks from 1990 to 2009; and the fourth on the systemic importance of financial institutions.
Regarding the future of securitization, Fender and Mitchell argue that measures aimed at eliminating the overhang of so-called legacy assets are showing some signs of success, but that ultimately changes in the structure of the securitisation process are required to attract new investors. They review initiatives currently being implemented in a number of areas and then discuss mechanisms aimed at aligning incentives between originators and investors through forced retention by originators of a portion of their securitisations. The authors conclude that overly prescriptive, "one-size-fits-all" requirements are not likely to achieve the desired objective. Instead, they propose that retention requirements be kept flexible while at the same time ensuring that investors are aware of all necessary details concerning retention both at issuance and over the lifetime of a transaction.
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