Law Commons^™

Revamping Green Securitization Frameworks In The Eu, Samuel Pinson

University of Miami International and Comparative Law Review

Sustainable finance and green investments have grown from a trend to a dominant investment strategy throughout asset classes globally, and the EU is no exception. The EU published its Green New Deal and Sustainable Finance Strategy as roadmaps toward a more sustainable and equitable future. The twin reports contain comprehensive plans and initiatives to make sustainable finance more accessible through effective regulation. Stemming from those initiatives were various regulatory frameworks such as the EU Taxonomy, the Corporate Sustainability Reporting Directive, the Sustainable Finance Disclosure Regulation, and the EU Green Bond Standard. The regulations above are aimed at everything from public …

What Doesn’T Kill You Makes You Stronger: The Shifting Strategies Of Japan’S Yakuza In Response To Economic Globalization And Securitization, Benjamin P. Murkison

Honors College Theses

The Yakuza in Japan is a deeply traditional and infamous ethnic mafia, which has historically based their profits off of the protection of gambling rings and street vendors, but have developed into one of the most sophisticated and wealthy criminal institutions in the world. Reaching their peak in the 1960’s with around 200,000 members, the Yakuza has been in a slow decline ever since. However, the past decade has seen the most dramatic drop in Yakuza numbers in recorded history, as a result of increasing securitization by the Japanese state. As their power has declined within Japan, they have only …

Securitizing Notes Of Small Businesses And Needy Workers, Tamar Frankel

Faculty Scholarship

Businesses, whether large ones or small ones, such as restaurants and small shops, are presently closed and some of their employees have been laid off.¹ Currently, the government is lending money to these small businesses² and the now unemployed workers for their sustenance. It then collects the payments from some of the borrowers and the source of the rest of the money is taxes.³ Since not all, or perhaps only a few, small businesses own real estate, they might sign notes promising to repay the loans but can offer no asset backing. Presumably, the nation’s financial deficit …

A Tale Of Two Markets: Regulation And Innovation In Post-Crisis Mortgage And Structured Finance Markets, William W. Bratton, Adam J. Levitin

All Faculty Scholarship

This Article takes the occasion of the tenth anniversary of the financial crisis to review recent developments in the structured products market, connecting the emergent pattern to post-crisis regulation.

The Article tells a tale of two markets. The financial crisis stemmed from excessive risk-taking and shabby practice in the subprime home mortgage market, a market that owed its existence to the private-label, originate to securitize model. But the pre-crisis boom in private label subprime mortgage-backed securities could never have happened absent back up financing from an array of structured products and vehicles created in the capital markets—the CDOs that found …

The New Mechanisms Of Market Inefficiency, Kathryn Judge

Faculty Scholarship

Mechanisms of market inefficiency are some of the most important and least understood institutions in financial markets today. A growing body of empirical work reveals a strong and persistent demand for “safe assets,” financial instruments that are sufficiently low risk and opaque that holders readily accept them at face value. The production of such assets, and the willingness of holders to treat them as information insensitive, depends on the existence of mechanisms that promote faith in the value of the underlying assets while simultaneously discouraging information production specific to the value of those assets. Such mechanisms include private arrangements, like …

The ‘Security Pacific Letter’: Estimating The Causal Effect Of Securitization On Banks’ Systemic Exposure, Paul-Angelo Dell'isola

Dartmouth Undergraduate Journal of Politics, Economics and World Affairs

This paper aims to test the hypothesis of the ‘Safe Asset narrative’

which states that banks became manufacturers of pseudo safe assets to meet

a global shortage of safe assets in the pre-crisis period. In this narrative,

securitization is the mechanism which enables banks to become underwriters

of safe assets. This paper takes this hypothesis to the data and attempts to

estimate the causal effect of securitization on banks’ systemic exposure. In

particular, this paper exploits a regulatory change that occurred in 1987 when

the OCC expanded the scope of assets US national banks could securitize. By

using state-chartered banks …

Volume I | Issue Ii | 2019.Pdf, Dujpew Editorial Board

Dartmouth Undergraduate Journal of Politics, Economics and World Affairs

No abstract provided.

Mobilizing Public Markets To Finance Renewable Energy Projects: Insights From Expert Stakeholders, Paul Schwabe, Michael Mendelsohn, Felix Mormann, Douglas J. Arent

Felix Mormann

Financing renewable energy projects in the United States can be a complex, time consuming, and expensive process. Currently, most equity investment in new renewable power production facilities is supported by tax credits and accelerated depreciation benefits, and is constrained by the pool of potential investors that can fully use these tax benefits and are willing to engage in complex financial structures. For debt financing, non-government lending to renewables has largely been provided by foreign banks that may be under future lending constraints due to economic and regulatory conditions.

To discuss these and other renewable energy financing challenges and to identify …

The Cfpb’S Endaround, Chris O'Brien

Catholic University Law Review

The financial crisis of 2008 led Congress to enact the Dodd-Frank Wall Street Reform and Consumer Protection Act and establish the Consumer Financial Protection Bureau (CFPB) to better protect consumers. Although Dodd-Frank and the CFPB introduced sweeping changes to many areas of financial lending, automobile dealers and financers were expressly excluded from oversight by the CFPB. Despite this express limitation on the CFPB’s authority, the Bureau nonetheless expanded its definition of “larger participants” to encompass automobile dealers and financiers. This action has resulted in duplicative regulatory oversight and increased costs to consumers, which in turn, imposes additional burdens on those …

Maine's Foreclosure Mediation Program: What Should Constitute A Good Faith Effort To Mediate?, Jesse D. Stewart

Maine Law Review

The collapse of the housing bubble and subsequent financial downturn of 2008 unleashed a flood of foreclosure filings in the Maine courts, threatening the fundamental aspiration of homeownership for many Maine residents. This Comment examines the significant steps Maine has taken to address increased foreclosure filings through the implementation of a foreclosure mediation program and offers concrete suggestions to further improve the program.

Too Conflicted To Be Transparent: Giving Affordable Financing Its ‘Good Name’ Back, Cassandra Jones Havard

All Faculty Scholarship

Securitization, the process of pooling loans for re-sale on the secondary market, is an important part of mortgage financing. It creates more capital for mortgages and makes home pricing affordable, which is beneficial to borrowers. The subprime crisis exposed intrinsic structural flaws in the mortgage securitization process. Chief among them is the “issuer-pays” model of credit ratings. Issuers, who bundle loans for sale on the securities market, are required to have an independent analysis from a credit rating agency or a Nationally Recognized Statistical Rating Organization (NRSRO) prior to the sale of the securities to investors. This rating is not …

Property And The True-Sale Doctrine, Heather Hughes

Articles in Law Reviews & Other Academic Journals

The true-sale doctrine governs financial transactions involving hundreds of billions of dollars each year. Yet this doctrine is confused, unsettled and subject to differing approaches from state to state: it lacks normative foundation and it lacks coherence. The true-sale doctrine determines the fate of investors asserting ownership of securitized assets at the expense of unsecured creditors, such as employees. It distinguishes assignments to secure loans (leaving assets potentially reachable by unsecured creditors), from outright sales (making assets the exclusive property of investors). A rich literature addresses the efficiency of securitization. But scholars and policy-makers have failed to sufficiently relate positions …

Royalty Securitization, Kristelia García

Publications

No abstract provided.

Property And The True-Sale Doctrine.Pdf, Heather Hughes

Heather Hughes

Placing "Rights And Liberties In Pawn Until The Defeat Of Hitlerism”: Canadian Intelligence Gathering In The Second World War, Austin M H Williams

The Great Lakes Journal of Undergraduate History

Abstract:

A monograph regarding the history of Canada’s intelligence gathering apparatus has not been published, leaving a gap in modern historiography. In an attempt to partially fill this academic void, this essay examines RCMP intelligence Bulletins drafted during World War Two that have been declassified under the Access to Information Act. Analysis of the Bulletins clearly indicates the Canadian intelligence gathering apparatus underwent a massive expansion of scope during the war. The RCMP began investigating people and organizations based upon their race, religion, political affiliation or nationalist beliefs. Disregard of human rights and privacy during the period was so …

Drafting And Securitizing Participation Mortgages: A Re-Introduction, Spencer J. Coopchik, Yildiray Yildirim

The Journal of Business, Entrepreneurship & the Law

This Paper will reintroduce, explore, and expand on the financing arrangement known as a Participation Mortgage. First, this Paper will cover the features, history, and policy purposes behind the mortgage. Second, the Paper will focus on legal mechanics and drafting considerations of Participation Mortgages, so they may later be securitized. Finally, the Paper will explore the possibility and legality of creating Participation Mortgaged Backed Securities to be sold in the secondary market.

Avenues To Foreign Investment In China’S Shipping Industry—Have Lease Financing Arrangements And The Free Trade Zones Opened Markets For Foreign Non-Bank Investment?, Rick Beaumont

Rick Beaumont

No abstract provided.

Avenues To Foreign Investment In China’S Shipping Industry—Have Lease Financing Arrangements And The Free Trade Zones Opened Markets For Foreign Non-Bank Investment?, Rick Beaumont

Rick Beaumont

No abstract provided.

Private And Public Ordering In Safe Asset Markets, Anna Gelpern, Erik F. Gerding

Publications

An influential literature in economics explores the phenomenon of “safe assets” – when participants across financial markets act “as if” certain debt is risk free – as well as its role in the global financial crisis and its implications for post-crisis reform.

We highlight the role of private ordering in constructing safe assets. Private ordering, including contractual devices and transaction structures, contributes to the creation of these debt contracts, to their collective treatment in financial markets as low risk investments, and to the making of deep and liquid markets in them. These contracts and transaction structures also provide a template …

Bank Regulation And Securitization: How The Law Improved Transmission Lines Between Real Estate And Banking Crises, Erik F. Gerding

Publications

This essay examines how securitization served as a new coupling rod joining cycles in real estate and banking markets and created a new pathway for financial contagion in the “subprime” financial crisis. Legal changes promoted the growth of securitization and improved this crisis transmission line. The essay examines the history of legislative and regulatory changes that facilitated bank participation in the markets for mortgage-backed securities. The essay then explains how securitization failed to mitigate the credit, liquidity, and interest rate risk associated with real estate when losses in residential markets became correlated nationwide. It then discusses how regulation contributed to …

Avenues To Foreign Investment In China’S Shipping Industry—Have Lease Financing Arrangements And The Free Trade Zones Opened Markets For Foreign Non-Bank Investment?, Rick Beaumont

Rick Beaumont

No abstract provided.

The Fhfa's Proposed Single Security Structure, David J. Reiss

David J Reiss

The Federal Housing Finance Agency (FHFA) has posted a Request for Input on “the proposed structure for a Single Security that would be issued and guaranteed by Fannie Mae or Freddie Mac.” The FHFA states it is most concerned with achieving “maximum secondary market liquidity” (Request for Input, at 8)

I am skeptical about the reasons for this move to a Single Security and whether it will achieve maximum liquidity. Moreover, it is unclear to me that this move reflects an urgent need for the FHFA, the two companies, originating lenders or borrowers. While I have no doubt that it …

Subprime Market Roller Coaster Disaster, Willa E. Gibson

Akron Law Faculty Publications

This essay discusses the economic and societal implications of the subprime market losses with an emphasis on the federal regulators’ inability to curtail such losses. It discusses collateralized mortgage obligations and how these debt securities fueled the subprime market. The essay discusses how each of the players – lenders, debtors, investment bankers, securities firms and investors – speculated on homes whose values were a mere illusion. It describes how each party along the chain starting with the lender, used basic risk-shifting principles to engage in reckless speculation assuming they could externalize the cost associated with their behavior. It also identifies …

The Future Of The Private Label Securities Market, David J. Reiss

David J Reiss

The PLS market, like all markets, cycles from greed to fear, from boom to bust. The mortgage market is still in the fear part of the cycle and recent government interventions in it have, undoubtedly, added to that fear. In recent days, there has been a lot of industry pushback against the government’s approach, including threats to pull out of various sectors. But the government should not chart its course based on today’s news reports. Rather, it should identify fundamentals and stick to them. In particular, its regulatory approach should reflect an attempt to align incentives of market actors with …

Turning A Blind Eye: Wall Street Finance Of Predatory Lending, Kathleen C. Engel, Patricia A. Mccoy

Patricia A. McCoy

No abstract provided.

Dodd-Frank’S Risk Retention Requirement: The Incentive Problem, Amy L. Mcintire

Amy L. McIntire

On July 21, 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law (Dodd-Frank). Promulgated by Congress to promote the financial stability of the United States by improving accountability and transparency in the financial system, the bill represented an almost complete overhaul of the entire financial regulation system. Specifically, a provision in the bill mandated that securitizers “retain not less than five percent of the credit risk for any asset,” and this requirement became known as the “risk retention requirement.” Legislators hoped that, by forcing securitizers to hold onto a percentage of the risk …

Turning A Blind Eye: Wall Street Finance Of Predatory Lending, Kathleen Engel, Patricia Mccoy

Patricia A. McCoy

No abstract provided.

Turning A Blind Eye: Wall Street Finance Of Predatory Lending, Kathleen Engel, Patricia Mccoy

Patricia A. McCoy

Today, Wall Street finances up to eighty percent of subprime home loans through securitization. The subprime sector, which is designed for borrowers with blemished credit, has been dogged by predatory lending charges, many of which have been substantiated. As subprime securitization has grown, so have charges that securitization turns a blind eye to financing abusive loans. In this paper, we examine why secondary market discipline has failed to halt the securitization of predatory loans.

When investors buy securities backed by predatory loans, they face a classic lemons problem in the form of credit risk, prepayment risk, and litigation risk. Securitization …

Securitize Me: Stimulating Renewable Energy Financing By Embracing The Capital Markets, Andrew C. Fink

The University of New Hampshire Law Review

The current system of financing renewable energy projects is broken and inadequate, especially when compared to the framework for participating in oil and gas ventures. The solution lies in borrowing accepted energy business practices and adapting them to solar and wind energy projects. This Article focuses on the current issues facing renewable energy project financing in the United States, analyzes failed attempts to stimulate growth, and presents the securitization of renewable energy assets as a solution. Drawing on current legal structure and debates from the corporate sphere, this Article also discusses specific securitization techniques that can help to democratize and …

Who Should Be Providing Mortgage Credit To American Households?, David J. Reiss

David J Reiss

Who should be providing mortgage credit to American households? Given that the residential mortgage market is a ten-trillion-dollar one, the answer we come up with had better be right, or we may suffer another brutal financial crisis sooner than we would like. Indeed, the stakes are as high as they were in the Great Depression when the foundation of our current system was first laid down. Unfortunately, the housing finance experts of the 1930s seemed to have a greater clarity of purpose when designing their housing finance system. Part of the problem today is that debates over the housing finance …