Financial Institutions Hope TALF Will Attract Securitization Investors
2009-03-13 by: Mike Scorelle
The Term Asset-Backed Securities Loan Facility, or TALF, will likely attract hedge funds as new buyers of asset-backed securities (ABS), although the facility may fall short of its stated lending potential of $1 trillion due to certain restrictive terms and adverse market conditions, according to a Standard & Poor's Ratings Services report published today. The revival of the securitization markets, which bundles and sells pooled loans that banks originate, is essential to getting financial institutions lending again.
2009-03-13 by: Mike Scorelle
The Term Asset-Backed Securities Loan Facility, or TALF, will likely attract hedge funds as new buyers of asset-backed securities (ABS), although the facility may fall short of its stated lending potential of $1 trillion due to certain restrictive terms and adverse market conditions, according to a Standard & Poor's Ratings Services report published today. The revival of the securitization markets, which bundles and sells pooled loans that banks originate, is essential to getting financial institutions lending again.
Translation: Just because securitization was a primary factor in getting us into trouble in the first place doesn't mean that we will stop trying. After all, that old fashioned way of lending and holding the loan on your own books as a lender is so passe. The new way is superior and will help reduce risks!
(Please refer to my earlier post "The definition of Insanity")
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