Securitisation and the global economic crisis

In the current pantomime of financial regulatory turmoil, the villain of the piece is easily cast – securitisation. Even the relative obscurity of the word has added to its perceived villainy. A difficult word to pronounce for the uninitiated, it has been booed and hissed at by politicians of all sides. The Turner Review, published on 18 March, firmly places securitisation – at least in its more complex forms – at the heart of the current banking crisis. Does it deserve its reputation?

Current criticisms

Will the suggested remedies work? Politicians and experts talk of the need for increased transparency, greater accountability, and a closer alignment of interests between investors, shareholders, banks and executives.