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.”

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