Me Oh MI
On Monday, the global banking, securities and insurance regulators that constitute the Joint Forum issued a consultative paper that says, in essence, none of them will cozy up to private mortgage insurance unless the product meets an array of new prudential restrictions. While these differ from those the Financial Stability Board – yet another global uber-regulator – laid out to keep MI out of the prohibitions applicable to “shadow” standards, the two statements lay out the shape of a new MI framework that will require a major redo in the U.S. if, as we expect, bank regulators, the FHFA and/or Congress set their sights on it.
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