Principia Exposes Gaps in Structured Finance Investors Risk Oversight as ABS and MBS Trading Increases
Summary
90% of the investors that responded stated that over the next two years their organizations had plans to implement technology to improve analytical, risk and operational processes to overcome challenges in managing ABS, MBS and structured credit investment portfolios.This includes an inability to monitor pool performance measures that must be tracked for capital relief under the Basel II Securitization Framework Enhancements, such as delinquency, default, recovery and prepayment rates.The fully auditable operational environment delivers a scalable infrastructure to rapidly address changing management, regulatory and accounting mandates, and ensures transparency at every stage of the portfolio lifecycle.Investors often conceded that they were less than effective at performing the necessary level of due diligence required for continued investment in structured finance securities.Over 500 senior securitization market participants from 200 organizations took part in the study between June and September 2010.This includes an inability to monitor pool performance measures that must be tracked for capital relief under the Basel II Securitization Framework Enhancements, such as delinquency, default, recovery and prepayment rates.
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