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Tooze, Helen Alexandra Joan

University of British Columbia

This dissertation critically examines the European Union’s Securitisation Framework, focusing on its regulation of vulnerabilities within the originate-to-distribute financial intermediation model for complex structured products. The analysis is particularly pertinent in light of the Global Financial Crisis, which exposed significant vulnerabilities such as herd behaviour, leverage, interconnectedness, complexity, too-big-to-fail, regulatory arbitrage, and information asymmetry. The novelty of this research lies in its structural methodology, which deconstructs the intermediation chain into eight distinct stages. This approach provides a granular and comprehensive framework for evaluating the EU’s regulatory measures at each stage of the securitisation process. The methodology includes a systematic doctrinal analysis to scrutinize the black letter of the law within a structured framework, emphasising securitisation-related vulnerabilities identified through an extensive literature review. These vulnerabilities serve as a lens through which the regulation is evaluated, ensuring a focused and relevant critique. This structural breakdown highlights the complexity of the securitisation process and reveals how vulnerabilities manifest and propagate through the chain. For instance, during the ‘Issuance’ stage, moral hazard was indirectly identified as a significant concern. Issuers may exploit this stage to distribute poor-quality structured products without bearing the associated risks, underscoring the necessity for comprehensive regulatory measures across all stages of intermediation. The research concludes that while the EU’s Securitisation Framework incorporates several measures to address vulnerabilities. The regulation of these vulnerabilities goes a long way in mitigating the risks involved in securitisation transactions. Overall, this thesis contributes to the understanding of securitisation’s role in financial intermediation and its regulation, providing insights into the ongoing efforts to fortify the stability of the European financial system through a detailed structural analysis of the intermediation chain.

Text

2024-10-07

Attribution-NonCommercial-NoDerivatives 4.0 International

http://hdl.handle.net/2429/89345

Law

University of British Columbia

UBCV

http://creativecommons.org/licenses/by-nc-nd/4.0/