Regulating synthetic securitisation following the global financial crisis

Edward Podolski-Boczar

    Research output: Contribution to journalArticleResearchpeer-review

    2 Citations (Scopus)

    Abstract

    This article explores whether proposed changes to the regulation of synthetic securitisation in Australia are sufficient in light of the Global Financial Crisis. Synthetic securitisation is specifically chosen as an object of study, given the relative ease with which it can be over-used. The article examines several theoretical problems with securitisation, which entice corporations into excessively risky behaviour. Contrary to popular belief, it is established that agency issues are not a serious problem with securitisation. Instead, managerial behavioural biases are shown to be most problematic. The article recommends stricter capital adequacy relief requirements, which would provide a disincentive for excessive risk-taking by potentially over-confident managers.
    Original languageEnglish
    Pages (from-to)1 - 14
    Number of pages28
    JournalAustralian Economic Review
    Volume2012
    Issue number45
    DOIs
    Publication statusPublished - 2012

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