"The Shape of Things to Come? Accounting, Regulatory and Other Developments that May Affect Recovery in the Securitization Markets"

Although the broader U.S. economy is finally showing signs of a tentative recovery, the strength and duration, or at least the speed, of the recovery will depend to a significant degree on whether there is a revival in the U.S. private label securitization markets. Sooner or later, the U.S. government is likely to pull the plug on emergency assistance to U.S. banks and other financial institutions, and companies will need to rely once again on private markets to fulfill their financing needs. Despite the obvious need for a rapid recovery in securitization markets, a raft of recent accounting, regulatory and other developments threaten to make securitization much more complicated and costly, and may have the unintended effect of discouraging a revival in securitization. This Stroock Special Bulletin examines these developments and how they may affect the recovery of the securitization markets.