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Will 2004 deliver for securitization?

Reich: initiative is “vital for improving
conditions for SMEs in Germany and
stopping the credit crunch”

Will Germany finally start to generate true-sale securitizations next year, with all that means for the German economy?

"To be the biggest economy in Europe and not participating in the fastest-growing asset class is not logical," says a London-based asset-backed securities specialist. "Germany has been dominated by synthetic deals, and they are hard to sell. You need true-sale deals to achieve critical mass, and it's inevitable they will happen."

But German true-sale deals have been a long time coming. In July, German development bank KfW and 12 other banks signed a letter of intent to set up a special purpose vehicle to promote their True Sale Initiative (TSI). The banks would then pool loan portfolios and sell them into the capital markets through the SPV. At a press conference in London, Hans W Reich, the chairman of KfW's board of managing directors, described the TSI as "vital for improving conditions for SMEs in Germany and stopping the credit crunch".

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