Regulating synthetic securitisation following the global financial crisis

Podolski, Edward 2012, Regulating synthetic securitisation following the global financial crisis, Australian economic review, vol. 45, no. 1, pp. 14-28, doi: 10.1111/j.1467-8462.2011.00664.x.

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Title Regulating synthetic securitisation following the global financial crisis
Author(s) Podolski, EdwardORCID iD for Podolski, Edward
Journal name Australian economic review
Volume number 45
Issue number 1
Start page 14
End page 28
Total pages 15
Publisher Wiley
Place of publication Chichester, Eng.
Publication date 2012-03
ISSN 0004-9018
Keyword(s) synthetic securitisation
Global Financial Crisis
Summary 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.
Language eng
DOI 10.1111/j.1467-8462.2011.00664.x
Field of Research 140203 Economic History
Socio Economic Objective 949999 Law
HERDC Research category C1.1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2012, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research
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Department of Finance
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