Securitization: The Conflict between Personal and Market Law (Contract and Property)
Annual Review of Banking Law, P. 197, 1999
Posted: 7 Oct 1999
The Article suggests that many problems posed by securitization stem from the transformation of loans, viewed as contracts, into securities, viewed as personal property. Noting that because both contract and property protective legislation supports the "small guys" against the "big guys," regardless of whether they are borrowers (from banks) or lenders (to large issuers), the legislation creates a conflict between small borrowers and small investors. The Article discusses specific problems that these differences and conflicts raise in securitization, which commodifies personal relations, and the legal solutions that may give the upper hand to creditors, or debtors, or leave the resolutions of the issues to the markets.
JEL Classification: K22, G13, G21
Suggested Citation: Suggested Citation