Although the securitization of assets is common practice in many countries, there are others that do not have regulatory frameworks that allow the efficient use of the figure.
The reasons why these frameworks have not been developed are various, but it is important to comment on the financial reasons that should be the main source of the analysis for the implementation of the regulatory framework reasonable and transparent for all potential participants.
During certain periods of time and due to various situations, financial market participants maintain positions of high liquidity, which generally associated with a lower demand for credit, allows them to have resources for longer-term investments, but which in turn can be negotiable in the financial market, since logic allows us to suppose that the situation of high liquidity is transitory and that investors need to have a reasonable outlet for their investments when circumstances warrant.
This excess liquidity should serve mainly for the development of infrastructure projects, especially in countries where it is difficult to generate internal resources, whether of public or private origin. Therefore, the regulatory framework to be developed must be clear to all participants, which in turn will serve to promote the longer-term stock market.
As we mentioned earlier, some of the advantages associated with securitization processes are the following:
- Internally generated resources are used.It allows financial intermediaries to participate in projects of a social nature.It generates long-term paper for the stock market.It allows intermediaries to release resources from their portfolios to generate new portfolio.
This topic allows much more analysis than has been done, but it is good to mention some securitizations, which allow us to draw attention to the flexibility of this figure:
- Healthcare Finance Group $ 500 million of future cash flows to be generated from healthcare billing Football teams: Parma, (Italy) € 94 million Everton (England) £ 30 million.
Source: NAFIBO Securitization Company
