The Joint Forum has released a report that looks at what incentivised firms to use securitisation during the financial crisis. It considers the benefits investors saw in securitisation but how conflicts of interest contributed to loss of investor confidence. It says both originators and investors still see benefits in securitisation but makes three main recommendations to regulators. The recommendations:
- say regulators should address the misaligned incentives and conflicts of interest and develop a regime that supports enhanced disclosure and transparency for investors;
- suggest a supervisory framework that should be consistent across borders and sectors; and
- support greater transparency from markets and greater use of standardised documentation.