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Assets Securitization in European Financial Scope

Journal: Oblik i finansi (Vol.1, No. 76)

Publication Date:

Authors : ;

Page : 91-98

Keywords : simple; transparent and standard securitization; mortgage securities; negotiable financial instruments; bank; financial stability;

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The article identifies failures on the securitization market and obstacles for its intensification as relying on the analysis of development trends of this market section of negotiable financial instruments in Europe, evaluating proposals for generating a model of simple, transparent and standard securitization. It is found that the available structure of the European securitization market is deformed (by asset types, across regions due to a high rate of support by issuer and originator banks), which may jeopardize the financial stability. In view of such market conditions and mindful of a considerable potential of its development (according to volumes of probable basic assets) it appears expedient that a number of measures should be taken to foster the development, simultaneously using the regulation instruments designed to maintain the stability of the securitization market. The proposed draft of simple, transparent and standard securitization in the EU along with the implementation of a great number of advanced principles of law has a lot of drawbacks in ensuring financial stability (it fails to solve the problem if synthetic securitization, fraudulent arrangements as to STS qualification being possible) and it needs upgrading.

Last modified: 2017-10-04 19:55:57