cross - border securities transactions. 4. lessons of the recent market turmoil turning to more recent events, the emergence of structured products, where the creditor is separated from the debtor by a complex financial infrastructure that transforms and repackages the underlying asset, might create significant legal challenges and this might become an important concern in the light of the recent market turmoil. who pays if debtor a defaults, in case his debt has been repackaged by bank b, sold to the non - bank intermediary c and finally to investor d? these are legitimate questions that need to be addressed carefully. but answers have to be given if the uncertainties surrounding the current environment are to vanish. as you know, a number of policy initiatives have been launched at the global level since the summer, for instance by financial stability forum 5 or by the porto informal ecofin 6 and it is still difficult to anticipate precisely the legal aspects which will be examined more particularly by the various international and european fora and bodies involved in this discussion. however, these initiatives provide an indication of possible legal considerations which might emerge, in particular in the european context. legal certainty should go hand in hand with transparency. the focus on the transparency of complex financial instruments, of institutions and vehicles and on the appropriate disclosure of information on securitised debt and other structured financial products indicates that there is a need for regulatory and supervisory authorities to have a closer look on the legal frameworks applicable to securitisation transactions and market standards and how special purpose vehicles are currently regulated and supervised in the various eu member states and at also at the international level. the report of the european financial markets lawyers group ( efmlg ) of may 2007 on legal obstacles to cross - border securitisations in the eu 7 contains recommendations for further convergence of securitisation laws in the eu and invites the commission to consider the adoption of a eu directive on specific legal aspects of securitisations which would enable member states to adopt a certain number of principles common to all jurisdictions to ensure a high level of transparency, efficiency and legal certainty with regard to securitisation transactions. 8 see financial stability forum, fsf working group on market and institutional resilience, preliminary report to the g7 finance ministers and central bank governors, 15 october 2007, available at : http : / / www. fsforum. org / publications / publication _ 24 _ 88. html. the informal ecofin of porto considered that

, while enhancing market efficiency, financial innovation also raises obvious challenges to the regulatory and supervisory authorities. in this context, the economic and financial committee ( efc ) was invited ( i ) to review how to further improve transparency of complex financial instruments, of institutions and vehicles, as well as how to improve valuation processes, risk management and liquidity stress testing. the efc is also invited to consider the role of rating agencies in structured finance. available at www. efmlg. org. in its report on financial integration in europe ( march 2007 ), the ecb indicates that it has been active in various initiatives of the efmlg to overcome legal barriers to financial integration, such as through the closer harmonisation of securitisation laws in the eu and contributed in particular to the efmlg report on cross - border legal obstacles to securitisation. in two opinions concerning draft laws on securitisation in luxembourg and france, the ecb indicated that it stressed that, looking beyond the commission ’ s financial services action plan, it saw merit in a strategy of increased harmonisation in the area of securitisation at the eu level ( see in this respect ecb opinion in the context of the current financial turbulence, another issue which is often mentioned is the methodologies followed by rating agencies in the field of structured finance and the need to benefit from legal opinions assessing in an appropriate manner the legal risks related to the securitisation deal ’ s core components and identifying properly the rights of investors. at this point, let me not abuse of your time any longer. i hope that i have effectively conveyed the message that we, as policy - makers, care that the global financial system is put on a solid legal footing. i wish you all the best for this conference in contributing to this endeavour. thank you for your attention. con / 2004 / 30 of 14 september 2004 at the request of the french ministry of economic affairs, finance and industry on a draft decree concerning fonds communs de creances ( securitisation funds ) and ecb opinion con / 2004 / 3 of 4 february 2004 at the request of the ministry of finance of the grand duchy of luxembourg on a draft law on securitisation ).