The collapse of unlisted mortgage companies: a regulatory dilemma

Keneley, Monica, Wines, Graeme and Jain, Ameeta 2017, The collapse of unlisted mortgage companies: a regulatory dilemma, Accounting research journal, vol. 30, no. 1, pp. 1-27, doi: 10.1108/ARJ-12-2014-0108.

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Title The collapse of unlisted mortgage companies: a regulatory dilemma
Author(s) Keneley, MonicaORCID iD for Keneley, Monica
Wines, Graeme
Jain, AmeetaORCID iD for Jain, Ameeta
Journal name Accounting research journal
Volume number 30
Issue number 1
Start page 1
End page 27
Total pages 27
Publisher Emerald Group Publishing
Place of publication Bingley, Eng.
Publication date 2017-05-02
ISSN 1030-9616
Summary Purpose Policy issues associated with the regulation of the unlisted debenture market have been highlighted in recent times with the collapse of a number of regionally based mortgage companies. The purpose of this paper is to analyse the decline and demise of the unlisted debenture market between 2007-2013 with particular reference to the effectiveness of the regulatory regime in stabilising the industry and protecting investors’ interests. Design/methodology/approach A database was constructed which reflected the total population of unlisted mortgage companies in the financial sector. A snapshot approach was used to assess the extent to which these companies complied with regulatory provisions.

Findings suggest the regulatory process allowed these companies to continue operating despite not complying with the relevant Australian Securities and Investment Commission (ASIC) benchmarks. In the light of the current inquiry into the financial system, the research suggests that a re-evaluation of the regulatory approach is timely.

Research limitations/implications
This research is restricted to a study of one category of debenture issuers ( issuers of mortgage finance). It is based on reports required by regulatory authorities. It does not provide an analysis of the motivations of investors in these companies. Practical implications This research has implications for the implementation of regulatory change in respect to oversight of shadow banking activities. It suggested that a passive approach to regulation is not sufficient to ensure that the interests of investors are fully protected.

No prior research has systematically examined the unlisted mortgage and analysed the borrowing and lending activities of companies that have failed and those that have survived.
Language eng
DOI 10.1108/ARJ-12-2014-0108
Field of Research 150201 Finance
150102 Auditing and Accountability
1501 Accounting, Auditing And Accountability
1502 Banking, Finance And Investment
Socio Economic Objective 900101 Finance Services
HERDC Research category C1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2017, Emerald Group Publishing
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Document type: Journal Article
Collections: Faculty of Business and Law
Department of Finance
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