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Article 122a Disclosure Compliance and 

                                                    ECB ABS Loan-level Data Handling Infrastructure Solution

For issuers of structured finance securities, TYI will consult on a low cost solution that guarantees both issuer and investors will be able to comply with all disclosure and 'know what you own requirements' of Article 122a.  This is the necessary low cost data handling infrastructure solution for processing, verification and transmission of ABS loan-level data in compliance with the ECB ABS Loan-Level Initiative.

Why choose TYI?  

As demonstrated by its patented information technology, TYI is an expert in designing ABS data handling infrastructures.  As required by the ECB, TYI is an independent party external to the Eurosystem with no conflicts of interest.  

Why choose the TYI solution?

The solution is designed to ensure that the loan-level data is made available to all market participants at the lowest cost to issuers and investors.  The solution establishes the processes and systems necessary for submitting the loan-level data electronically. The data is checked for compliance with the specific requirements, as well as for accuracy, consistency and timeliness.



A frequent outcome of financial innovation is that information gaps appear.  Good data in the form of more timely, accurate information resides with one party and is unavailable to other market participants.  This information asymmetry causes two major problems. 

  • First, as described by Joseph Stiglitz in his Nobel Prize winning work, this information asymmetry leads to both financial markets malfunctioning by freezing up and a loss of trust.  For example, the lack of good data interferes with the ability of investors to do their homework on structured finance securities.  Without good data, it is impossible for investors to know what they own.  Without good data, no matter how sophisticated their analytic and pricing tools are, investors can't accurately value the securities.  This valuation is the starting point for making portfolio management decisions because this valuation is compared with the prices shown by Wall Street to make buy, hold and sell decisions.  When it became apparent in 2007 how much of an informational advantage Wall Street had, investors stopped buying and selling structured finance securities.  The low cost way to unfreeze this market and restore trust is to provide investors with good data.
  • Second, without good data, regulators are effectively stymied in their efforts to monitor and mitigate developing systemic risks.  The basic builiding block of systemic risk regulation is the individual position.  The total risk of a portfolio, a financial institution or a market is the sum of the individual positions.  Without good data, it is impossible for regulators to implement best risk management practices and monitor every position every day to identify developing risks within financial institutions or markets.  Without good data, regulators have to deal with issues like Too Big To Fail because regulators don't have the information necessary to understand the degree of risk and the impact of failure.

For over a decade, TYI has been a leader in developing low cost solutions to fill these information gaps so that good data is made available to all market participants.  TYI's earliest work has been patented.


The Brown Paper Bag Challenge

TYI developed the Brown Paper Bag Challenge to highlight the information gap that exists with existing disclosure practices for structured finance securities.  The Challenge also shows how this information gap explains both why the structured finance market froze at the start of the credit crisis and why it has been so difficult to unfreeze since then.


          Comments:    SEC Proposed Revisions to Structured Finance Disclosure Requirements II

                               SEC Proposed Revisions to Structured Finance Disclosure Requirements

                               CEBS Consultative Paper on European Capital Requirements Article 122a

                               BOE Consultative Paper on Information Transparency for Asset-Backed Securitisations

                               FDIC Safe Harbor Proposal

                               FDIC Safe Harbor Proposal:  Observable Event-based Reporting for Structured Finance

                               ECB Provision of ABS Loan-Level Information in the Eurosystem Collateral Framework


          Background speeches, articles, interviews and papers on TYI:

                                    Institutional Risk Analytics:  Basel III gets headlines, but EU Article 122a is the story

                                    Institutional Risk Analytics:  Covered Bonds and the Reform of Structured Finance

                                    Fortune.com:  How Goldman Exploited the Information Gap


                            Blog:  Trust Your Instincts

                            Fortune Magazine:  6 simple steps to really fix Wall Street

                            New York Times:  Fair Game - Loan Pools That Need Some Sun

                            Financial Times:  Insight:  Solving the Valuation Problem

                            Bloomberg Column:  Shadow-Banking System Next Up for De-Stressing

                            CNBC Closing Bell:  Balance Sheet Burdens

                            Wall Street Journal article:  Math Wizards Working on Spells to 'Cure' 

                            ABS East 2008 Speech:  Paper or Plastic?  The Case for Real Time Collateral Level Transparency

                            Chicago Tribune article:  Market Stability Depends on More Truth-Telling

                            Fortune article with TYI's transparency solution in "Now What" section:  Chaos on Wall Street

                            Total Securitization Learning Curve Column:  Implementing Transparency

                            Boston Magazine article:  The Man Who Would Save the Economy

                            Bloomberg article: Subprime Credit Market Seizure Solution Seen in Hospital Bills


        Background on TYI, LLC's Management


For more information, please contact Richard Field at (781) 453-0638 or (508) 878-6717 or email us at tyillc@comcast.net .