Abstract

http://ssrn.com/abstract=1012937
 
 

Citations (7)



 
 

Footnotes (572)



 


 



Securitization and Its Discontents: The Dynamics of Financial Product Development


Kenneth C. Kettering


University of Miami - School of Law


Cardozo Law Review, Vol. 29, pp. 1553-1728, 2008
NYLS Legal Studies Research Paper No. 07/08-7

Abstract:     
This article takes as its point of departure the financing technique referred to as "securitization," a close cousin of secured lending that has grown to enormous size since its origin more than two decades ago. The article pursues two themes. One is a critique of the legal foundations of securitization, which includes a perspective on aspects of fraudulent transfer law that are well established historically but have been neglected in recent decades. The other is exploration of the implications of this product growing so vast despite its dubious legal foundations. In that regard, the article explores two points of legal sociology that apply to new financial products generally. The first is that a product can become so widely used that it cannot be permitted to fail, notwithstanding its dubious legal foundations. The second is that the debt rating agencies have become de facto lawmakers, because it is their decision to give a favorable rating to a financial product the credit quality of which depends on a debatable legal judgment that allows the product to grow too big to fail. Two nascent products are identified as candidates for the operation of a similar dynamic. The article ends with a normative assessment of securitization from a pragmatic perspective, concluding that legislative action is appropriate to ratify the product's object, with constraints.

Number of Pages in PDF File: 176

Keywords: securitization, structured finance, fraudulent conveyance, fraudulent transfer, substantive consolidation, secured transaction, security interest, too big to fail, repurchase agreement, repo, derivatives, rating agency, credit rating agency, standby letter of credit, financial products

Accepted Paper Series


Download This Paper

Date posted: September 8, 2007 ; Last revised: September 4, 2011

Suggested Citation

Kettering, Kenneth C., Securitization and Its Discontents: The Dynamics of Financial Product Development. Cardozo Law Review, Vol. 29, pp. 1553-1728, 2008; NYLS Legal Studies Research Paper No. 07/08-7. Available at SSRN: http://ssrn.com/abstract=1012937

Contact Information

Kenneth C. Kettering (Contact Author)
University of Miami - School of Law ( email )
1311 Miller Drive
Coral Gables, FL 33146
United States
305-284-2547 (Phone)

Feedback to SSRN


Paper statistics
Abstract Views: 7,990
Downloads: 2,599
Download Rank: 2,196
Citations:  7
Footnotes:  572

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo4 in 0.266 seconds