Securitisation Industry Excesses Caused the Global Crisis, Says Majority of Financial Execs

Excesses in the securitisation industry, coupled with a failure of valuation practices and risk management, were among the leading causes of the global financial crisis, according to the majority (54%) of respondents at the Financial Times (FT) Electric Money Conference: Liquidity in Crisis. In an informal poll conducted by Sybase and the FT, found that 50% of the senior financial executives polled thought that the crisis, while far-reaching in scope, can be fixed through the kinds of government intervention and bailout programs that are being implemented. Some 38% believe that the financial industry, while structurally sound, will also require adjustments to regulatory and accounting practices to return to an even keel. Just over half (53%) of the survey’s respondents see a long-term challenge in trying to formulate regulations that can keep up with the dynamic, innovative nature of the financial industry – and Wall Street in particular. Sinan Baskan, financial markets director at Sybase, said: “Public policy will be key to a recovery. Successful public policy could lead to larger trading centres and greater stability internationally. If these policies are not well implemented, market disruption and dislocation will most likely be prolonged.”

Comments are closed.