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    • Thread Starter

    Hi everyone,

    I’ve been tasked with writing a paper in 8 days time – the question is this:

    “Critically discuss the nature, purpose and effect of securitisation. In doing so, you should, amongst other things, refer to the structure of a securitisation, and the sorts of problems that may arise”.

    My current understanding of the topic is this:

    1. Nature of Securitisation
    What is securitisation

    2. Purpose of Securitisation
    What is the objective/goal of securitisation
    Reason why organisations do securitisations

    3. Effect of Securitisation
    The result/outcome of securitisation
    Raise finance
    Interplay with the capital markets
    Benefit to society and economy
    Flow of liquidity

    4. Concerns/issues
    Global financial Crisis and how securitisation significantly inflated the problem
    Open to abuse – credit ratings agencies/government/financial institutions (all in bed with each other due to being financially blinkered and self interested)

    5. Structure of a securitisation
    The basic structure
    Transferring the receivables
    Security and risk
    Cash flow in the structure
    The role of ratings agencies
    Regulatory issues
    Tax issues

    6. Other securitisation structures
    A description of variations to the standard securitisation structure, including variations on how the securities are issued and the type of SPV used.

    Also, credit default swaps, trusts.
    There is also the issue of “true sale”

    7. New EU Regulation on securitisation
    8. Basel III
    9. Dodd-Frank

    Not too sure what else there is. I'm particularly struggling with the problems that arise section. If anyone has any thoughts on this, the structure or indeed anything I have missed, please get in touch as it would be much appreciated.

    Many thanks, R.
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