The Securitization Market: Legal Risks, Regulatory Concerns and New Challenges. Securitization and Structured Finance: from Shadow Banking to Legal Harmonization?

Pierre de Gioia-Carabellese

Research output: Chapter in Book/Report/Conference proceedingChapter

Abstract

Securitizations affect the way a credit institution operates. Alongside structured finance, they allow a bank to free capital and transform risk management. In the literature of the last years, structured finance transactions have been frequently identified among the main suspects for the 2008 financial crisis. As such, these transactions are purported to pose a considerable threat to the financial markets and the reputed stability and transparency manifested therein. Thus, securitizations, the stereotypical transactions of this kind, have egregiously challenged the supervisory authorities, given the dearth of regulation in this area until a decennium ago. Nevertheless, securitization markets are still believed to provide operators with unique opportunities to raise finance through alternative funding and diversified funding sources.
Against such a backdrop, this chapter seeks to critically discuss and analyse the structure of a securitization and the much publicized legal risks it presents. Furthermore, along the epistemological fil rouge of the shadow banking system, the analysis is focused on how recent regulation in the EU has managed to address, among others, some crucial elements: (a) the protection of the investor and his/her right to be informed while investing in asset-backed securities; (b) the due diligence process that regulated entities must observe in connection with such securities. Ultimately, the scope of the research is to assess whether structured finance transactions may emerge from the most obscure area of shadow banking and become, by virtue of the regulation, consistent with what, etymologically speaking, securitization should be, securitas, hence safety.


Original languageEnglish
Title of host publicationResearch Handbook on Shadow Banking: Legal and Regulatory Aspects
PublisherEdward Elgar Publishing
Number of pages33
Volume1
Edition1
Publication statusAccepted/In press - 10 Sep 2016

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    de Gioia-Carabellese, P. (Accepted/In press). The Securitization Market: Legal Risks, Regulatory Concerns and New Challenges. Securitization and Structured Finance: from Shadow Banking to Legal Harmonization? . In Research Handbook on Shadow Banking: Legal and Regulatory Aspects (1 ed., Vol. 1). Edward Elgar Publishing.