In an interview published today in the Financial Times, the head of the Basel Committee, Stefan Ingves, indicates that significant liberalization of global securitization rules is in the works. As we have noted, current standards stymie private securitizations in anything like needed mortgage-market volume. Prospects of a regulatory rewrite are a critical new opening, especially given pressure coming in other rules – e.g., liquidity and leverage – that increase the urgent needs big banks have for a secondary market if they are to meet credit demand.
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