(Corrects paragraph 9 to read “$1.25 trillion of mortgage bonds” instead of “$1.25 billion”.)
Enough of tinkering around the edges, it’s time for tough reform. The Obama Administration’s plan to overhaul the regulation of the financial system doesn’t go far enough when it comes to the securitization market — a source of credit that both it and Wall Street see as vital to the future of consumer and commercial lending.
Chalk up another stumble for TALF, the Fed’s program to revitalize the securitization market. After expanding the program to include commercial mortgage-backed securities, the Federal Reserve on Tuesday reported that no one showed up to take advantage of the central bank’s attractive financing. Granted this was the inaugural round for loans to investors with eligible CMBS collateral, so it may take some time to take off.