TY  - CHAP
AB  - With the help of financial engineering – and equipped with the modern technique of risk management – securitisation was supposed to identify and evaluate risks and parcel them out to informed parties who could bear them. In hindsight, we can see that this somewhat simplistic thesis – espoused by market participants as well as the academic promoters of modern techniques of risk management – seemed to promise a great deal more than it could ultimately deliver. At this juncture, however, the danger of regulatory over-reaction – which might be throwing the baby (financial innovation) out with the bath-water (overlooking/under-pricing of risk) – is very real and (in my view) calls for policy measures of this sort should be resisted firmly not only by market participants but also by regulators. This is not to say that regulation should be seen as immune from responsibility in the unfolding of the current credit crisis (quite the opposite would more likely be closer to the truth). As we shall see below (Section “Financial Crisis and Credit Ratings Debacle in SF”), the best risk-management practices – and related tools available before the crisis – provided enough ammunition to caution against the uncertainty surrounding risk assessment for some categories of SF products. However, the increasing complexity embedded in an increasing number of deals did provide genuine new challenges even to best risk-management practices.
VL  - 2
SN  - 978-1-78052-092-6, 978-1-78052-093-3/2043-9059
DO  - 10.1108/S2043-9059(2011)0000002022
UR  - https://doi.org/10.1108/S2043-9059(2011)0000002022
AU  - Violi Roberto
ED  - William Sun
ED  - Céline Louche
ED  - Roland Pérez
PY  - 2011
Y1  - 2011/01/01
TI  - Systemic Risk in Structured Finance: Lessons from the Ongoing Financial Crisis
T2  - Finance and Sustainability: Towards a New Paradigm? A Post-Crisis Agenda
T3  - Critical Studies on Corporate Responsibility, Governance and Sustainability
PB  - Emerald Group Publishing Limited
SP  - 349
EP  - 374
Y2  - 2024/04/20
ER  -