Global Financial Crisis

A lot of effort has been done worldwide by various politicians and central bankers, using monetary policy and quantitative easing. However, one strategy may have been overlook, that is regulations. The root cause of the problem is investor confidence. And the best way to restore that is by imposing the right regulations that have not been inplace to deal with the way securitisation been going on for more than a century. Bad loans were made and pass through the credit markets. As a result the investor suffer.

Some would argue that this is too late. But it is never too late to rectify something that has gone wrong. This will ensure that the credit that is coming from securitisation keep coming, but with stronger and better quality credits.

Now, this may be something that the economy has never face before. But in some ways, it resemble the many previous problem that the banking sector had experienced. New laws will need to be made to regulate this activity.

Banks who perform securitisation would need to deposit higher amount of assets with the central bankers. Trustee or Investment manager will also need to fulfill certain prudential requirements.