Comments on European Capital Requirement Directive Article 122a

The proposed guidelines for CRD Article 122a focus on two issues:  “skin in the game” and “know what you own”.  The comments on the proposed guidelines, which are attached, are focused solely on know what you own.  They specifically look at the frequency with which data should be made available by credit institutions. 

Today, credit institutions track and report internally all observable events that occur with their on-balance sheet holdings of loans and receivables on the day the observable events occur.  These observable events include payments, delinquencies, defaults and insolvency.  An example of this can be obtained by going to the website for your credit card issuer and checking the billing and collecting activity on your card for the last 15 days. 
 
The credit institutions’ expertise in tracking and reporting observable events translates to securitisation products.  Using existing technology, the credit institutions that are involved in the daily billing and collecting could report to investors all observable events on the day they occur.  This frequency of reporting would truly let investors know what they own.
 
copyright material TYI, LLC @ 2010
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Richard Field,
Jul 23, 2010, 1:51 PM
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