Report on securitisation incentives released by the Joint Forum

13 July 2011

The Joint Forum today released its Report on Asset Securitisation Incentives. The Report is based on an extensive literature review, and interviews in Europe, the United States and Australia with originators, issuers, service providers and investors.

The Report analyses the incentives to engage in securitisation throughout the market before the financial crisis, the distortions created by misalignments and conflicts of interest which emerged, and the interplay of incentives in the aftermath of the crisis. It also examines some of the reasons why there has yet to be a meaningful recovery in securitisation activity. The Report outlines three recommendations to authorities on the tools and approaches they can employ to promote a sustainable and responsible securitisation framework.

Mr Tony D'Aloisio, Chairman of the Joint Forum, said "Re-establishing securitisation on a sound basis is a priority for the FSB and part of the G20's push to strengthen the international financial regulatory system. The Joint Forum recognises the important contribution it can make due to its cross-sectoral representation from the banking, insurance and securities sectors. Drawing on an extensive literature review and interviews with market participants in several key jurisdictions, this report provides an important perspective on the dynamics prevailing in securitisation markets and aims to inform the continuing regulatory efforts internationally to facilitate a sound and responsible framework for securitisation markets."

Key Findings

Key Recommendations