Long drying time for securitization markets

The securitization markets are probably no earlier than 2011 again “normal” work. These market participants express appreciation in a recent survey. The industry currently meets at an event in Las Vegas. Your pessimism underscores how important it is for governments and central banks is provided by the wasteland, where the emerging markets securitization financing gap.

Many years had the boom in securitization of loans fired: securities worth several thousand billion dollars were sold, with loans for homes, cars or student were secured. According to the American Securitization Forum securitizations made in 2007, half of the $ 5655 billion, which the U.S. credit markets have been collected. For the banks, this practice had the advantage that they are not lending on the books, and with capital had been unsuccessful.

Many of these securities were also considered a safe investment. With the outbreak of the crisis, but this funding source dried up. The collapse of house prices and the economic downturn, banks and investors have massive losses eingebrockt. The confidence in this market is now collapsed.

In the U.S., but also in countries like Germany and Britain will now discuss how to deal with these so-called toxic securities to be around. In particular, banks need from the perspective of many experts from these assets will be relieved, so that their capital base by further depreciation is attacked. It is expected that toxic paper a central role in the new bank rescue plan by the U.S. government will play, the Finance Minister Timothy Geithner on Tuesday should imagine.

“As long as traditional investors in the securitization market return, it will be difficult to market by the cheap financing to wean the government makes available,” said Joseph Astorina, a securitization analyst at Barclays Capital.

The pessimistic outlook for the industry stands in stark contrast to the estimates at the time of the industry get-togethers in the past year prevailed. At that time, the industry expected that the credit crisis by the end of 2008 largely ausgestanden would be. Now think 43 percent of 450 respondents that the markets until 2011 will function normally again. A quarter assumes that the problems until 2012 or even longer are. Nearly 7 percent even appreciate that the markets will never return to normal.

Four steps are considered by the respondents needed to fix existing faults. They call the overhang of distressed securities to address the mood of investors to improve the confidence of rating agencies to restore transparency and disclosure requirements to reform.