Truth and responsibility

The meltdown in subprime collateralised debt obligations will affect financial markets for years. One likely result will be a renewed market willingness to reward sound credit underwriting - and therein lies a valuable business opportunity, argues David Rowe

In a recent speech, Vaclav Havel, first president of the Czech Republic, offered an interesting perspective on what constitutes truth. In effect, he said "truth is information supported by responsibility". Perhaps without fully realising it, Havel eloquently captured a central failing that led to the crisis in the subprime collateralised debt obligation (CDO) market. In the rush to capitalise on investors' seemingly insatiable thirst for yield, many banks and other mortgage originators abandoned