Structured finance: Roundtable on regulation
The European Commission could seriously damage structured finance, say speakers.
(This article appears courtesy of International Financial Law Review, sign up for a free trial on their site)
Staff writer "The tactic of the European Commission seems to be to produce regulation that damages lending when they should be figuring out how to get lending started again," said Charles Roberts of Cadwalader Wickersham & Taft at IFLR's structured finance roundtable last month.
"They have all the time in the world to get these regulations right as no one is lending, yet they insist on rushing through poorly thought-out proposals."
The proposals in question are amendments to the Capital Requirements Directive that could force originators to hold a 10% stake in the instruments they distribute. But, as attendees at the roundtable in association with Morrison & Foerster heard, ill-considered regulation seems to be springing from all directions to save the financial system.
Roundtable participants Bruce Duncan of Citigroup, James Starkey of Cairn Capital, Morrison & Foerster's Peter Green and Roberts at Cadwalader were united in their belief that regulators need to listen more to industry proposals before they inflict unnecessary and pointless requirements on originators, investors and the ratings agencies.
"I think there's a danger that regulation is passed too quickly, without thinking about the consequences," said Green.