The 2007 meltdown in structured securitization
Subtitle: searching for lessons, not scapegoats
By: Jr. Caprio, Gerard, Asli Demirguc-Kunt, Edward J. Kane.
Contributors: Demirgüç-Kunt, Aslı, 1961-; Kane, Edward J.; World Bank.
Series: Policy research working paper -- 4756; Policy research working papers (Online) -- 4756.
Publisher: World Bank
Published: 2008
Place of publication: [Washington, D.C
Language: eng
Format: Electronic resource
Subjects: Asset-backed financing; Financial crises
Description: "The intensity of recent turbulence in financial markets has surprised nearly everyone.  This paper searches out the root causes of the crisis, distinguishing them from scapegoating explanations that have been used in policy circles to divert attention from the underlying breakdown of incentives.  Incentive conflicts explain how securitization went wrong, why credit ratings proved so inaccurate, and why it is superficial to blame the crisis on mark-to-market accounting, an unexpected loss of liquidity, or trends in globalization and deregulation in financial markets.  The analysis finds disturbing implications of the crisis for Basel II and its implementation.  The paper argues that the principal source of financial instability lies in contradictory political and bureaucratic incentives that undermine the effectiveness of financial regulation and supervision in every country in the world.  The paper concludes by identifying reforms that would improve incentives by increasing transparency and accountability in government and industry alike.   "--World Bank web site.
Notes: Title from PDF file as viewed on 5/12/2009.

Includes bibliographical references.

Also available in print.

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Mode of access: World Wide Web.