The Senate Banking Committee’s Securities Subcommittee conducted a wide-ranging hearing on the status of the securities markets in the aftermath of the 2008 financial crisis. In his opening remarks, Chairman Jack Reed stressed the importance of the securitization process and how some markets, particularly the residential housing mortgage market, are not functioning properly.
The witness panel comprised of academic and securitization experts, who agreed with Reed’s views. They described the fragile nature of the market and urged great caution in applying new regulations, such as for requiring lenders to retain a 5-percent stake on home mortgages sold onto the secondary market.
