Securitization

Abstract

AbstractThis chapter examines another type of shadow banking activity: securitization. In the wake of the 2008 crisis, new international standards on securitization were issued. From 2015 onwards, these standards were traded down to re-launch ‘simple, transparent and standardized securitization’. The first factor that affected the international governance of securitization was pace-setting by the main jurisdictions, the US and the EU, which, however, inverted roles over time. Puzzling among financial regulators contributed to the swings of the regulatory pendulum because, initially, regulatory agencies considered securitization as a problem to be addressed. Later on, it became a solution in order to provide additional credit to the real economy. The third factor that affected the international governance of securitization was lobbying by the financial industry, which sought to forge an alliance with private actors in the real economy and regulators in Europe.