What is it about?

Asset-backed securities were put under a scrutiny by the regulators on both side of the Atlantic. Most of the regulations devised after the global financial crisis were a result of market criticism. Covered bonds, on the contrary, received favorable treatment by regulations, despite the fact the they are similar to asset-backed securities in many aspects. This study performs a comparison of regulations governing both instruments and argues that most of the regulations might no be justifiable.

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Why is it important?

Regulations after global financial crisis have been punitive for securitisation. The grounds for these regulations might not be factual and so are the regulations. Therefore, there is a need to re-calibrate these regulations.

Perspectives

I tried to highlight the premises for the recent regulations concerning securitisation may not be correct. Hence, the regulations need to be revised. I tried to provide a different perspective by making a comparison with a similar security i.e. covered bonds. This comparison provide a different perspective to the reader who is interested in regulations for the securitisation market.

Ahmed Arif
National University of Computer and Emerging Sciences

Read the Original

This page is a summary of: Regulations for Securitisation and Covered Bonds: Too Much or Too Little, European Company and Financial Law Review, October 2019, De Gruyter, DOI: 10.1515/ecfr-2019-0019.
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