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Deeply And Persistently Conflicted: Credit Rating Agencies In The Current Regulatory Environment, Timothy E. Lynch
Deeply And Persistently Conflicted: Credit Rating Agencies In The Current Regulatory Environment, Timothy E. Lynch
Timothy E. Lynch
Credit rating agencies have a pervasive and potentially devastating influence on the financial well-being of the public. Yet, despite the recent passage of the Credit Rating Agency Reform Act, credit rating agencies enjoy a relative lack of regulatory oversight. One explanation for this lack of oversight has been the appeal of the potentially self-regulating nature of credit rating agencies that claim to rely deeply on their reputational standing within the financial world. There are strong arguments for doubting this reputational concern, including the conflicting self-interest of credit rating agencies whose profits are gained or lost depending on their ability to …
Exporting Risk: Global Implications Of The Securitization Of Us Housing Debt, Aaron J. Unterman
Exporting Risk: Global Implications Of The Securitization Of Us Housing Debt, Aaron J. Unterman
Aaron J. Unterman
The process of securitization has revolutionized the global debt market creating vast investment opportunities while fundamentally altering the dynamics of lending risk. Asset securitization allows risks to be transferred from mortgage lenders to investors through the sale of mortgage-backed securities. This detachment of risk has led to a lack of accountability within the industry and the creation of the infamous US sub prime mortgage market. This piece examines the effect of securitization on the international capital market focusing on the legal and economic implications of the rise and fall of the US housing market. It argues that this failure is …