| LONDON, March 17
LONDON, March 17 Global regulators will
intensify their efforts to revive a securitisation market
tarnished by the financial crisis and now seen by policymakers
as a key source of funds for the economy, the head of an
umbrella regulatory group told Reuters.
Securitisation bundles loans into interest-bearing bonds to
raise money that banks can use to fund themselves and lend to
Banks, particularly in Europe, are traditionally the main
supplier of loans but have become cautious as they focus on
rebuilding their capital buffers.
The International Organization of Securities Commissions
(IOSCO), which groups global market regulators, and its banking
counterpart, the Basel Committee, will consider possible
"IOSCO and the Basel Committee are close to agreeing on a
working group to look at how the securitisation markets are
working, and to see whether new thinking is needed." IOSCO
secretary general David Wright told Reuters on the sidelines of
a Chatham House financial conference.
The sector was tarnished when securitised products based on
subprime U.S. home loans became untradable in 2007, sowing the
seeds of a global markets meltdown and banking failures.
The European Union's executive European Commission is also
keen to bring securitisation out of the cold and will publish
its plans next week on ways to boost long-term financing.
Efforts to revive securitisation have also been caught up in
separate regulatory attempts to crack down on so-called shadow
banking, or lending outside mainstream methods such as regulated
The EU wants a greater amount of financing for the economy
from market-based sources like securitisation.
Currently about 30 percent of financing comes from such
sources, the rest from banks, roughly the opposite situation to
the United States which is a model some European policymakers
want to match to reduce the concentration of risks at banks and