An increasing proportion of securitisation deals will probably be seen in local currencies, said Deputy Managing Director of the Monetary Authority of Singapore (MAS) Ong Chong Tee at the Singapore Structured Credit Conference on Thursday.
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This is due to the turmoil in G3 markets (Japan, Europe and the United States) and partly because Asian currency products are gaining favour. To fully restore investors' faith and the market's long-term viability, Mr Ong recommended that issues regarding the origination standards, credit ratings and market pricing be addressed.
He added that the industry should confront the issue of whether retention of risks goes against the entire idea of risk transfer.
Mr Ong noted that investors may have chosen to misuse credit ratings, even using them as indicators of market or liquidity risk.
He also discredited the assumption that market prices provide a good gauge of an asset's value when they can be severely distorted. - CNA/so
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