Securitization and Post-Crisis Financial Regulation

Authors

Steven L. Schwarcz, Duke Law SchoolFollow

Document Type

Article

Publication Date

2016

Abstract

There are few types of securities as internationally traded as those issued in securitization (also spelled securitisation) transactions. The post-financial crisis regulatory responses to securitization in the United States and Europe are, at least in part, political and ad hoc. To achieve a more systematic regulatory framework, this article examines how existing regulation should be supplemented by identifying the market failures that apply distinctively to securitization and analyzing how those market failures could be corrected. Among other things, the article argues that Europe’s regulatory framework for simple, transparent, and standardised (“STS”) securitizations goes a long way towards addressing complexity as a market failure, and that the United States should consider a similar regulatory approach.

Citation

Steven L. Schwarcz, Securitization and Post-Crisis Financial Regulation, 101 Cornell Law Review Online 115-139 (2016)