GFMA urges holistic approach to securitisation proposals

03/21/2013 | Structured Credit Investor (U.K.)

GFMA is encouraging the Basel Committee on Banking Supervision to reconsider its starting assumptions as it revises its securitisation framework. "We believe that the proposals focus too narrowly on the credit losses, price declines and decreases in liquidity associated with subprime [residential mortgage-backed securities] during the financial crisis in 2008," according to GFMA. "While this is perhaps understandable ... they are not representative of the performance of securitisations globally, are unlikely to recur ... and do not mean that high quality securitisation in general is not a sound financing technique."

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