ASF 2008: A reflection of things past

At the American Securitization Forum’s (ASF) conference underway in Las Vegas, many of the industry panels looked back at 2007 and reflected on how the market reached to its current state. Participants also looked forward into this year, realistic about the market’s limited growth prospects, yet reiterating their faith in the securitization structure. Many participants also said the market is at a crucial turning point. In his speech, Sanjeev Handa, head of global public markets at TIAA-CREF, as well as chairman of the ASF said that the market is currently at a crossroad where it faces great challenges. How ABS professionals respond to these will have a “significant influence over the future of the market.” Handa outlined several factors that would position the market for a stronger future. Every market participant, from issuers and underwriters to rating agencies, should act responsibly, he said. Keeping an eye on credit performance is one way. Handa also mentioned transparency, emphasizing that the securitization business has very diverse sectors, and there should be a focus on providing the best information necessary to suit particular instruments. “Legislators are focused on our market,” he also said, adding that mortgage finance reforms are national in scope and the goal is to have uniform lending standards. If lawmakers do act, care should be taken so that they do not artificially restrict the availability of credit and threaten long-term market liquidity. Such restrictive moves include vesting new rights to bankruptcy courts and overriding rights in legal contracts.