phk
phknrocket1k
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« on: June 17, 2009, 12:47:39 PM » |
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New financial regulations
I don't get it (from Yahoo):
Securitization, or the packaging and selling of loans as securities, has been blamed by critics for eroding lending standards in the mortgage and other lending businesses.
A Treasury spokesman said the administration would propose requiring lenders to retain 5.0 percent of the risk they securitize. A bill to do this was approved in May by the U.S. House of Representatives, but is languishing in the Senate.
Here's my guess. Securitization has gotten a bad name because banks originated loans with no incentive to be careful. So to keep securitization going, we have to force people to take a stake
But maybe we should have less securitization. This does not seem to be on the table. Why not? Could it be because some one has hopes of making money on it again?
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