econintersect.com
  • 토토사이트
    • 카지노사이트
    • 도박사이트
    • 룰렛 사이트
    • 라이브카지노
    • 바카라사이트
    • 안전카지노
  • 경제
  • 파이낸스
  • 정치
  • 투자
No Result
View All Result
  • 토토사이트
    • 카지노사이트
    • 도박사이트
    • 룰렛 사이트
    • 라이브카지노
    • 바카라사이트
    • 안전카지노
  • 경제
  • 파이낸스
  • 정치
  • 투자
No Result
View All Result
econintersect.com
No Result
View All Result

Bhide: Stop Government Backing of Securitized Debt

admin by admin
9월 10, 2012
in 미분류
0
0
SHARES
0
VIEWS

Econintersect:  Amar Bhide,a professor at Tufts Univesrity Fletcher School of Law and Diplomacy, wrote in a Bloomberg column Sunday (09 amar-bhide-SMALL1September 2012) that mass production of securitized credit destablizes banks, shortchanges productive businesses and generally enables reckless borrowing.  In a scathing indictment of the financial practice that connects massive amounts of investable money with with markets that can create massive amounts of debt, like the home mortgage market, Bhide says an essential enabler of abuses of securitization is government guarantees of mortgages.Bhide says that a healthy economy needs both bank loan based financing and securitization.  He feels that regulation of securitization in a way that creates a favorable risk position for certain types of lending over others is a recipe for disaster, such as we saw in 2008.  Econintersect sees an inference that it could happen again.

Bhide says that the financial system needs to be fundamentally reformed and he is quote specific about one thing he thinks should be changed:

To fundamentally reform the financial system, we need to end state sponsorship of securitization.

He also thinks banks must remain on the hook for any loan they create, whether retained, sold off or securitized.

He has three specific conclusions:

First, the federal government must stop guaranteeing mortgage securities. If lawmakers feel impelled to divert credit to homebuyers, theSmall Business Administration’s approach of offering partial guarantees for housing loans would do less harm. Let the private sector securitize the loans if it can.

Second, banks should be required to evaluate the creditworthiness of every individual or business they directly or indirectly lend to, rather than outsourcing credit analysis to ratings companies or relying on reductionist statistical models. Allowing banks to buy securitized assets with only superficial knowledge of the ultimate borrowers is folly.

Finally, the SEC should focus on its original mission of policing stock markets, and not on every security that financial engineers dream up or ratings companies get paid to certify. The expansive application of securities laws has worked only too well, stifling judgment and relationship-based lending in favor of mechanized and anonymous transactions.

Editor’s note: Amar Bhide is an occassional contributor to Global Economic Intersection and is the author of a book on the finance system:   “A Call for Judgment: Sensible Finance for a Dynamic Economy“.

John Lounsbury

Source:

  • Securitization Shouldn’t Be the Government’s Business (Amar Bhide, Bloomberg, 09 September 2012)

References:

  • Analysis and Opinion articles by Amar Bhide

 

Previous Post

The World Is Far From Running Out of Hydrocarbon Fuels

Next Post

U.S. Drought: Worse than Most Realize

Related Posts

Bitcoin Is Finally Trading Perfectly Like 'Digital Gold'
Economics

Bitcoin Is Finally Trading Perfectly Like ‘Digital Gold’

by admin
Namibia Will Regulate And Not Ban Crypto With New Law
Finance

Namibia Will Regulate And Not Ban Crypto With New Law

by admin
6,746 ETH Valued At $12M Was Just Burned
Economics

6,746 ETH Valued At $12M Was Just Burned

by admin
Bitcoin Is Steady Above $29,000 Awaiting US NFP Figures
Economics

Bitcoin: What Next After Consolidation Ends?

by admin
US Government Offloads Another 8,200 Bitcoin – On-chain Data
Economics

US Government Offloads Another 8,200 Bitcoin – On-chain Data

by admin
Next Post

U.S. Drought: Worse than Most Realize

답글 남기기 응답 취소

이메일 주소는 공개되지 않습니다. 필수 필드는 *로 표시됩니다

Browse by Category

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

Browse by Tags

adoption altcoins bank banking banks Binance Bitcoin Bitcoin market blockchain BTC BTC price business China crypto crypto adoption cryptocurrency crypto exchange crypto market crypto regulation decentralized finance DeFi Elon Musk ETH Ethereum Europe Federal Reserve finance FTX inflation investment market analysis Metaverse NFT nonfungible tokens oil market price analysis recession regulation Russia stock market technology Tesla the UK the US Twitter

Categories

  • Business
  • Econ Intersect News
  • Economics
  • Finance
  • Politics
  • Uncategorized

© Copyright 2024 EconIntersect

No Result
View All Result
  • 토토사이트
    • 카지노사이트
    • 도박사이트
    • 룰렛 사이트
    • 라이브카지노
    • 바카라사이트
    • 안전카지노
  • 경제
  • 파이낸스
  • 정치
  • 투자

© Copyright 2024 EconIntersect