IMF says restarting securitisation markets is “critical” to a wider economic recovery; Detoxing radioactive term from crisis
Sep 22nd, 2009 | By Finfacts Ireland Business & Finance Portal | Category: News worldwide
The IMF said on Monday that restarting securitisation markets is “critical” to a wider economic recovery and it warned that new regulatory proposals might kill the market. Securitisation is defined as the process of taking an illiquid asset, or group of assets, and through financial engineering, transforming them into a security. However, the dressing up of unsustainable subprime mortgages from for example Las Vegas, to be sold as securities by Wall Street firms to municipalities in say Norway or Australia, have made the word radioactive but the Fund sees merit in detoxing the term and the procedure.