Vicious circles

A lack of transparency, both in terms of risk and price discovery for securitised structured products, has been a key driver in the global credit crunch. For things to move forward, banks and regulators need to rely less on complex quantitative techniques and instead promote an enterprise-wide risk management culture that is less opaque and more dynamic, says Philippe Carrel

In the aftermaths of the credit crunch, the main questions being asked in the securitisation market are whether the market will be reborn and when, whether price transparency is at all possible, and what regulators intend to do to improve things.

One answer to the first question is that the securitisation markets will re-emerge and thrive once more for the simple reason that they have to: the world needs securitisation for economic growth.

Yet it will take a new approach to managing risks for the

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