Spelling out the positive benefits for end-users is the most effective way for the securitization industry to get its message across to European lawmakers and regulators, Vicky Ford, member of the European parliament and a Conservative party spokeswoman on economic and monetary affairs, said in her keynote address to the Global ABS conference this morning.
“To be honest, the financial services industry gets itself in a mess when it tries to gets its message across,” Ford said, responding to a question following her speech. She told delegates that elected officials are much more likely to focus on clients’ issues rather than those of the financial institutions themselves. “Having the investor side saying, ‘We need access to this market—we need this tool,’ is more effective,” Ford said.
She stressed that securitization can be a vital bridge between borrowers and investors, and a vital tool for financial institutions. Ford is a former JPMorgan investment banker and now a member of the European parliament’s influential Economic and Monetary Affairs Committee, a group tasked with steering large parts of the European-level financial reforms through parliament.
“But we need responsible regulation. Much of the regulatory kick-back to the crisis may have been over the top,” Ford said, citing the wave of regulatory changes set to impact the market, including Basel 3, the Capital Requirements Directive and Solvency II.
She welcomed industry moves to develop a European-wide “kitemark” or uniform standard, particularly on transparency. But at the same time, she cautioned against excessive harmonization, noting rules in certain areas, including loan-to-value ratios, may face difficulties.