July 2009
2 posts
Regulatory Capital Equivalence Principle
Caution: Though brief, this post will likely be impenetrable to anyone who doesn’t have a working understanding of regulatory capital requirements, securitization, and how rating agencies fit into both.
Here’s an idea for Basel III. Next time we design new capital requirement rules, let’s try to put in the following fail-safe principle to curtail the regulatory arbitrage.
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Zombie Securitization Market (and other bad...
Securitization refuses to die. Bloomberg is reporting that Morgan Stanley is planning to breathe new life into a recently downgraded CLO originally packaged by Goldman Sachs in 2007. Some key details are lacking in the Bloomberg piece, but here’s what I can piece together from the article and some other digging. I’ll do my best to put it in plain English so you can see how (I think)...
