ABS Vegas: Consistency needed to ensure U.S. stays capital markets destination

Industry wants regulators to look at big picture of regs

The new risk retention rules and lending standards have served as an impediment to mortgage investors and the housing market.

That was the broad consensus of a panel focused Tuesday morning on regulatory issues at ABS Vegas 2015, the Structured Finance Industry Group/IMN capital markets conference at the Aria Resort & Casino in Las Vegas. This is the second ABS Vegas conference since the split of SFIG from the American Securitization Forum.

More than 6,000 traders, investors and structured finance/securitization professionals turned out for the three-and-a-half day program, developed by leaders representing the full spectrum of industry participants including investors, issuers, financial intermediaries, regulators, law firms, accounting firms, technology firms, rating agencies, servicers and trustees.

Moderator Jason H. P. Kravitt, a partner with Mayer Brown led the panel that included Calvin Wong, chief credit officer at Morningstar Credit Ratings; Sairah Burki, director, for the Structured Finance Industry Group; Katherine Hsu, chief of the Office of Structured Finance in the corporation finance division at the Securities & Exchange Commission, and Deborah Toennies, managing director at JP Morgan Securities.

“A lot of regulations have gone into securitizations, so there’s been an enormous amount of change, and there’s just as much, if not more, to come,” Toennies said. “Some of them will have as large if not a larger impact to the overall markets.

“I am hopeful someone in the regulatory community is taking a look at the entirety of markets to ensure we haven’t gone too far, from a crisis (that initiated these regulations) that will impede future growth.”

Similarly, Burki said there needs to be more consistency for investors.

“(There’s) a need in terms of consistency across jurisdictions — look at the difference between the United States and Europe (in terms of) risk retention, the high quality securities standard on our doorstep,” she said. “(We need to) build some kind of consistent framework globally.

Kravitt said he wishes regulators would respect the rules and regulations of other countries to facilitate investment, for instance the differences in originating mortgages in the United States versus European countries.

“(It) makes it difficult for the United States to be a capital markets destination,” Kravitt said. 

3d rendering of a row of luxury townhouses along a street

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