The Trump administration is likely to take actions that will reduce regulation for the MBS and ABS markets. Industry participants are working to shape the actions while also staying nimble.
A task force at the National Association of Insurance Commissioners recommended adoption of a proposal to alter credit ratings on investments at insurance companies. However, NAIC didn’t move forward with the proposal at a meeting last week.
A bank sought approval from the OCC to have a special purpose vehicle treated as a securitization for capital requirement purposes. The OCC demurred, noting that just because the transaction was an SPV didn’t make it an ABS.
As AI becomes ubiquitous in both the origination and securitization of loans, the U.S. regulatory framework is likely to evolve closer to the stricter rules used in the European Union.
The SEC or another federal entity should map credit ratings among competing rating services, similar to efforts by regulators in other countries, according to Morningstar. The firm said rating mapping can help keep competition strong among rating services.
A proposal from FINRA to reduce the timeframe in which trades of MBS and ABS must be reported didn’t sit well with some industry participants, prompting the SEC to take a closer look at the proposal.
Some SWFs in other countries have extensive ownership interests in major corporations and sweep much of their profits into state coffers.
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