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  • The MicroGuide to Process and Decision Modeling in BPMN/DMN: Building More Effective Processes by Integrating Process Modeling with Decision Modeling
    The MicroGuide to Process and Decision Modeling in BPMN/DMN: Building More Effective Processes by Integrating Process Modeling with Decision Modeling

Entries in Credit Risk (1)

Thursday
Feb142008

Regulation of Structured Investment Vehicles (SIV)

And then Dick said "The first thing we do, let's kill all the lawyers". It seems we have been here before.

The topic is the current fiancial crisis and using business processes to prevent this from hapening again.SIV's for dummys is here, thanks for the content Motley Fool!

As a process and rules geek, I can't help wondering what set of tools could be made available to government and investors to prevent this type of imbalance in the credit markets.

SEC has a rule for reporting fraud. This is the proposed rule for investment advisors and the basic rules has been approved. Jones Day has a technical description of this here.
To quote the regulations:'"Fraudulent and deceptive activities which are prohibited and the extent to which the Commission is limited in this area by common law concepts of fraud and deceit... I wonder if knowingly bundleing a bunch of sub-prime mortgages as AAA rated is fraud?Reporting is under CFR Part 230, and 17 CFR Part 275

The problem is that the tightly regulated banking insdustry has avoided tight liquidity requirements by creating these off-book vehicles. Yet the chickens have come home to roost.