Not so bullish
Residential mortgage-backed securitisation has fallen out of favour following a rise in delinquencies in US subprime mortgage loans and uncertainty over valuations. For Spain, Europe's second largest securitisation market, such securitisation has become a key way for banks to offload risk and raise funds. How have the country's banks coped? By Wietske Blees
Securitisation has seen a swift fall from grace since August, with investors shunning new asset-backed paper amid worries over potential US subprime mortgage loan exposure and uncertainty over valuations. The lack of liquidity has had painful consequences for banks reliant on wholesale funding - a prime example is UK mortgage bank Northern Rock, which was forced to rely on a collateralised liquidity facility hastily put together by the Bank of England in September after it was unable to raise
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