Cum se trateaza boala/US lenders face crucial reforms

By Jennifer Hughes in London
Lenders in the US will have to retain a stake in any pools of loans they repackage and sell on to investors under proposed reforms aimed at remedying some of the practices that led to the credit crisis.
The proposals to make issuers of securitisations keep some "skin in the game" were put forward by the Securities and Exchange Commission on Wednesday in a bid to rehabilitate a key cog in the financial system.
The securitisation industry, considered a crucial form of funding for consumer loans, froze during the financial crisis and is only now beginning to thaw.
Securitisations are bundles of loans that are then sold as new bonds secured on the repayments of the underlying loans.
Key among the proposals on Wednesday is the plan to make issuers retain at least 5 per cent of each class of securities they issue - which they will not be able to hedge against.
One of the biggest criticisms of the industry's role in the crisis was its "originate to distribute" model where lenders were able to pass on the risks of their lending with little incentive to check the quality of the loans.
This was most evident in the subprime mortgage market, which lent to borrowers with patchy credit histories.
Other proposals put forward on Wednesday would require lenders to produce far more data on the individual loans underlying the bonds. They would also mandate a period between the bonds being offered and the deal -closing.
In the frothy pre-crisis days, demand for some deals was so strong that investors have complained they did not have a chance to read the paperwork before deals closed.
The SEC's proposals tackle similar issues to schemes put forward by the European -Central Bank and the Bank of England.
Industry participants are privately calling for all three to co-ordinate their demands.
Some have also warned that the ongoing uncertainty surrounding the eventual rules in all jurisdictions - and different accounting treatments - are hampering efforts to revive the market with many lenders fearful of being caught out by new requirements.
US participants were on Wednesday also pushing for more co-ordination between local regulators.
"There are certain improvements that need to occur but too many changes and it might simply be too costly to engage in securitisation and then the availability of private credit will suffer," said Tom Deutsch, executive director of the American Securitization Forum.
Both Congress and the Federal Deposit Insurance Corporation have published their own proposals. {OP CUT} Yesterday, Sheila Bair, chairman of the FDIC, said the SEC's ideas demonstrated "a common approach that will further the ultimate goal of ending arbitrage and implementing securitisation reforms across the entire market."
The SEC will issue detailed plans in the coming days for the industry to comment on.