Securitisation Warnings

Speakers at the American Securitisation Forum have warned that changes stemming from Dodd Frank and Basel 3 could seriously hamper liquidity in the securitisation markets.

The Volcker rule is expected to see major paper losses as inventory held by traders and structurers loses value due to lower liquidity. Regulators argue that the slack in proprietary trading will be taken up by non-bank firms.

Basel 3 will increase the level of capital required to support securitisation structures.

There are also worries that different national interpretations of the legislation will cause further problems.