Securitization in Emerging Markets

Abstract

The object of this paper is to discuss the introduction of securitization in emerging markets and the lessons that can be drawn from the global financial crisis. In the first section of the document, Part I looks at the general advantages of securitization -- as perceived prior to the global crisis -- and the acceptance of U.S. (legal) institutions as role model. Part II explores the challenges faced by emerging markets in implementing the U.S. model. This pre-crisis assessment is based primarily on the analysis of the following three articles: DOUGLAS W. ARNER, Emerging Market Economies and Government Promotion of Securitization (2002); GEORGETTE CHAPMAN POINDEXTER & WENDY VARGAS-CARTAYA, En Rut Hacia El Desarrollo: The Emerging Secondary Mortgage Market in Latin America (2002); YUWA WEI, Asset-Backed Securitization in China (2007).In the second section of the document, Part III suggests several lessons that can be learned from the financial crisis. Part IV raises questions about the future of securirtzation in emerging economies.