Mechanisms Of Securitization Research Articles

Others as Security Threats: Securitizing Discourses, Social Magic, and the Bureaucratic Field

For over 20 years, there has been an ongoing debate about what is primary in the process of securitization—discourses or practices. Traditional research on securitization tends to analyze discourses and practices separately, which can be seen even in studies that attempt to combine these two approaches. In this context, the concept “discourses” refers to a wide range of public political statements, while the concept “practices” mainly refers to the strategies of security professionals. I argue that, in order to gain a better understanding of securitization processes, the research focus should be narrowed to first-order securitizing performatives and the related securitizing practices. This approach will highlight political statements that can genuinely alter social reality, bridge the gap between discourses and practices, facilitate the analysis of institutional mechanisms of securitization, and help obtain much new relevant empirical material. The potential benefits of the proposed approach are illustrated through the analysis of two cases: the Italian case and the Russian case. For the Italian case, the analysis includes declarations of states of emergency related to the exacerbation of the “nomad issue.” For the Russian case, it examines legal acts stipulating the official recognition of migrants as prone to terrorism.

Securitization for common health

Securitization is the process of turning a financial asset, such as a loan or a mortgage, into a security that can be bought and sold on the market. Insurance-linked securities have been developed in order to foster the risk-transfer from insurers to capital market. In the context of pandemics or health crisis, securitization has been used to raise funds for crucial healthcare infrastructure and resources. However, securitization can also play a role in lowering infectious rates of pandemics as a part of risk mitigation strategies. Securitization can be engineered at higher standards and levels involving different actors. In the current paper, we propose an operational securitization mechanism based on the previous work by Di Lorenzo and Sibillo (2020) where a bond with coupon linked to the infection rate is introduced in order to reduce the risk exposure of an insurer offering health coverage. The combination of bond and health policies is structured in such a way to foster the economic operators (insureds, insurer, investors on capital market) to reduce the pandemic risk. It follows that companies might guarantee collective health for their workers if they subscribe insurance policies. Indeed, issuing such a bond on the market is challenging, due to poor market liquidity and, then, due to difficulties in pricing. In these regards, we value the pandemic-linked bond via an approach based on an inter-temporal CRRA utility function that, in its turn, determines a certain equivalent financial bond. The comparison values the pandemic-linked bond at varying with investors’ risk-aversion and sustainable-projects desirability. This provides an estimation of the risk-transfer cost for the insurers.

Design and Pricing of Wenzhou Geological Disaster Risk Bond

In this paper, the direct economic losses of geological disasters in Wenzhou from 2007 to 2021 are taken as the sample data, and according to the distribution characteristics of geological disasters, considering the moral hazard, the yield and price of geological disaster bonds are calculated by using capital asset pricing model (CAPM) and bond pricing principle, so as to carry out the preliminary design of geological disaster risk bonds. Finally, based on China's market environment, this paper puts forward some suggestions on how to promote the securitization mechanism of catastrophe insurance and improve the catastrophe insurance market.

Is asset securitization an effective means of financing China’s renewable energy enterprises? A systematic overview

Under financing difficulties, asset securitization has the advantages of activating stock assets, enhancing credit, and isolating risk and is therefore a potential financing mode for renewable energy enterprises. This paper provides a systematical overview of asset securitization financing as it applies to renewable energy enterprises. The feasibility of such financing is first analyzed from the perspectives of the typical financing difficulties experienced by renewable energy enterprises, the underlying assets available for securitization, the legal and policy basis for such financing, as well as the history and current state of the practice in China and internationally. On this basis, three asset securitization mechanisms are proposed. Two case studies are conducted, which use a financing cost measurement model to show that asset securitization offers no cost advantage and that its main advantage lies in its high accessibility. Currently, asset securitization financing for China’s renewable energy enterprises faces many difficulties, including the inadequacy of government subsidies as underlying assets, the high risks and cost of asset securitization financing, the challenges of patent securitization, and imperfections of institutions and mechanisms. It is suggested for Chinese government that to ensure adequate revenue for renewable energy projects and reduce risks and cost, promote patent securitization and improve the basic institutions and mechanisms of securitization.

Features of capitalization of natural resources of the agricultural sector

The process of acquiring the properties of natural assets by natural resources with the ability to bring permanent capital income to their owners is considered. It is proved that ensuring the efficiency of the process of capitalization of natural resources within the scope of agricultural production is possible only within the framework of the implementation of an integrated approach to the management of territorial economic systems. The main elements of the securitization mechanism as a way of converting unused assets into income-generating capital elements through the use of stock instruments are presented.

Territorialization on tour: The tourist gaze along the Silk Road Economic Belt in Kashgar, China

Since 2009, and over the following decade, Kashgar Old City—an historical space of Uyghur culture and Islam and home to 220,000 residents—was largely demolished and rebuilt for tourists. Today, Kashgar and the Xinjiang region are major conduits into Eurasia and have become critical nodes in China’s national tourism development and Belt and Road Initiative (BRI). While scholars have addressed the geoeconomics of BRI, we know much less about how contested spaces of Chinese development are securitized. Tourism, we argue, is increasingly enrolled into the state’s broader territorialization-by-securitization strategy. The tourist gaze—or the socio-spatial mediation of touristic experience and performance—is included in this strategic arsenal. In contested areas such as Xinjiang and Tibet, the tourist gaze is spatially deployed by the state as a biopolitical mechanism that facilitates the deepening territorialization of the region and coerces ethnic minority residents to perform a sanitized revisioning of their culture, history, and religion. This article draws on interviews with Uyghur former tour guides and residents of Xinjiang, critical analysis of English and Mandarin language popular media, and observations of congruent patterns of the securitization of tourism destinations as a state-strategy of territorialization in Tibet to demonstrate how the tourist gaze is deployed as a spatial mechanism of securitization and territorialization along the Silk Road Economic Belt in Kashgar. The article contributes to emerging scholarship on the growing role of tourism in broader practices of securitization and territorialization in China and beyond.

Territorial dispute at home: strategic narratives contestation over the Diaoyu/Senkaku Islands nationalization policy in Japan

Abstract Japan’s ‘nationalization’ of three islands of the Diaoyu/Senkaku Islands in 2012 involves a Sino–Japanese territorial dispute as well as a strategic narrative contestation within Japan. This article argues that ‘strategic narrative’, a persuasive discursive tool, can exert power through three communicative processes (formation, projection, and reception) in the same way as Copenhagen School’s ‘securitization’ concept. Thus, the strategic narrative can be used to explain the mechanism of securitization. In the 2012 Diaoyu/Senkaku nationalization crisis, the then Tokyo Governor Ishihara Shintaro formed and projected a ‘provocation narrative’ to securitize the territorial issue, and then Japanese Prime minister Noda Yoshihiko attempted to use a ‘peace and stabilization narrative’ to calm things down. After analyzing the narrative contestation processes between Ishihara and Noda, this article finds that it was Ishihara’s triumph on the battlefield of strategic narrative, despite the result of the ultimate success of Noda to ‘nationalize’ the disputed islands.

СЕК'ЮРИТИЗАЦІЯ ІНФРАСТРУКТУРНИХ ПРОЄКТІВ: СУТНІСНІ ХАРАКТЕРИСТИКИ ТА ОСНОВИ ОРГАНІЗАЦІЇ

Recently, the growing trends in the development of project financing mechanisms which are focused on the use of stock market instruments. Such trends are explained by an increase in interest in new financial technologies that being infiltrated into various spheres of economic activity and reduced the existing barriers to entry into the market of infrastructure projects by institutional investors. In the early stages of development, securitization was viewed as a transaction to write off assets from the balance sheet of banks. However, later the approaches to the definition of securitization have been changed. Such changes are caused by the development of financial technologies and the intensification of activities in the mortgage lending market. Nowadays, the approaches of scientific researchers to the interpretation of securitization do not differ significantly. Discrepancies relate to clarifications related to the pragmatic nuances of the implementation of this financial technology. Based on the generalization of various approaches to disclosing the essence of the conceptual apparatus of the definition of "securitization", the main features of the securitization of infrastructure projects as a financial technology aimed at minimizing credit risks by converting non-current assets into a liquid form by issuing securities are identified. In the features of securitization of infrastructure projects by types of infrastructure assets, by types of securities and by types of issuers of infrastructure liabilities are proposed. The meaning of the term "infrastructure bonds" has been revealed and the features inherent in infrastructure bonds are investigated. The study of foreign experience made it possible to identify the features of infrastructure bonds, which made it possible to substantiate the elements of a mechanism for bond financing of securitized infrastructure projects. Financial instruments of protection against credit risk have been investigated. In particular, these apply to insurance contracts, guarantees or credit default swaps. The financial schemes for the implementation of the securitization mechanism, including classical, synthetic, accumulative schemes have been considered.

Securitization of Memory: a Theoretical Framework to Study the Latvian Case

The article suggests and argues a theoretical framework for studying a particular case of memory securitization. It is based on the constructivist perception of security that is systematically framed in the studies of representatives of the Copenhagen School, who consider security as a socially constructed phenomenon and define identity protection to be one of its primary goals.
 Pursuant to this approach, the article presents a correlation between memory and security in at least three aspects. In the first instance, similar to security, collective memory is socially determined. In the second instance, collective memory lies at the core of various forms of identity, including national identity. In the third instance, collective memory is not only an object of protection but also a resource, which is used by securitization actors for threat identification, enemy image modeling as well as for defining the means of protection.
 The Latvian case is applied for setting the theoretical framework of the memory securitization model. In future, it might be used to study specific juridical and political mechanisms of memory securitization in the countries of Central and Eastern Europe.
 The authors perceive the securitization of memory as a diverse complex of measures aimed at establishing and setting a certain historical narrative, as well as convincing society to be actively loyal to it. Accordingly, the policy of memory is defined as a mechanism for putting securitization in practice. The initial conditions for understanding this process in Latvia are the post-communist transition, ethnocultural divisions of the society, and the external factor represented by Russia, that promotes its historical narratives.
 In one respect, R. Brubaker’s concept of the “nationalized” state is taken as a theoretical model of the politics of memory in Latvia. According to this concept, the official narrative of post-communist countries has been set as a nation-oriented one. On the other hand, the concept of the memory regime developed by M. Bernhard and J. Kubik is also considered. As per their theory, the memory regime in Latvia can be described as being divided into the official and alternative narrative of counter-memory, which is based on the Soviet legacy.

Securitization as an innovative refinancing mechanism and an effective asset management tool in a sustainable development environment

Today’s realities dictate to Ukrainian companies a management philosophy that requires them not only to maintain their position in the market, but also to increase the efficiency of their operations and development in the context of favorable and unfavorable changes in the market environment, which necessitates significant amounts of financial resources. In the face of global competition and the increased turbulence of the external environment, securitization is one of the alternative tools to attract additional financing as well as to minimize risks by which financial markets can support sustainable finance in the transition to a green economy. The article deals with the essence of securitization as one of the major financial innovations of our time. It is established that this financial mechanism allows to diversify sources of financing, to effectively manage the structure of the balance sheet of the enterprise, as well as to significantly increase the level of liquidity of its assets. It also describes the main types of securitization and their impact on the structure of balance sheet indicators. The practical relevance of the study is that the authors’ highlighted areas of change in financial performance make it possible to make an smart decision on the use of a particular securitization mechanism, considering the purpose of its implementation and the capabilities of its initiators, including in the transition to a green economy. It is suggested for the successful implementation of the concept of a “green” economy aimed at achieving sustainable development goals in Ukraine, using such financial instrument as sustainable securitization through the use of the collateralized loan obligation mechanism.

СЕК’ЮРИТИЗАЦІЯ: НОВІ ВИКЛИКИ У СИСТЕМІ ІНСТИТУЦІОНАЛЬНОГО ЗАБЕЗПЕЧЕННЯ ВІДТВОРЕННЯ ТА ОХОРОНИ МЕЛІОРОВАНИХ ЗЕМЕЛЬ

The article substantiates that a need to find new financial reserves has arisen within a land relations sphere in order to improve a meliorative infrastructure. The author proves that it is required to form an institutional ground for recreation and preservation of ameliorated lands using a land assets securitization as a new financial instrument. The structure of the process of bank loans replacement by securities, which are supported by land assets mortgage, is presented based on the retrospective analysis of the securitization institute emergence. Five stages have been defined in order to organize land mortgage assets, according to these stages the securitization agreement should be planned and prepared; the land assets evaluation should be completed to support the future stream of payments and predefined pool of land assets should be formed;  the agreement should be structured, the specifically created establishment should be picked as well as other counter-parties, and documents should be prepared to get signed; the reinvestment should be held via the direct emission of securities engaging target groups of investors; the ongoing support and control of the securitization agreement should be set up. The article also provides the analysis of a normative and legal field of existing limitation concerning land mortgage assets securitization. Magistral directions, which can increase the investment attractiveness of ameliorated lands, has been proposed, such as: land market infrastructure development; gradual withdrawal of the moratorium, which is prohibiting agricultural lands free realization, in particular ameliorated lands; formation of the institute of private and collective property for some categories of lands; institutionalization of the land assets securitization mechanism; corporatization of land assets. It is claimed that the approbation of the securitization should be started with private property lands, and later considering the outcome efficiency of this process, and new experience implemention, it should also be applied to lands, which refer to a private and collective property. The author designates, that the position of the state should enforce institutional conditions towards lands realization rights (agreement, emphyteusis, superficies), land auctions, securitization agreements development, formation of the land preservation and recreation funds, investments to the nature conservation and nature improvement projects with a strict state control over the targeted usage of land resources.

Resisting human rights through securitization: Russia and Hungary against LGBT rights

Contributing to the literature on norm resistance and backlash, this article explores the phenomenon of norm immunization, that is, the creation of legal barriers by a state with the purpose of fending off a transnationally diffusing norm by blocking its local advocacy. How do norm immunizations occur? What conditions facilitate or hinder this process? Focused on the area of lesbian, gay, bisexual, and transgender (LGBT) rights, the article’s main argument is that a state’s immunization against these rights is undertaken through the securitization of nontraditional sexual orientations and gender identities. The article applies the theorized securitization mechanism to the (attempted) immunization against LGBT rights in Russia and Hungary in the last decade and identifies the relevant differences between the two cases to inductively sketch a general explanation of the success and failure of norm immunization attempts.

Improving the Restructuring of Distressed Assets Through Securitization on Emerging Markets

This article reveals the concept of asset securitization as one of the mechanisms for improving the business through the transfer of selected, homogeneous assets to a special financial purpose vehicle. The definitions of the types of mechanisms for restructuring and improving enterprises in Kazakhstan are given. It is concluded that the asset securitization mechanism can be successfully applied in a rapidly changing business environment, and can also be used widely enough for companies to attract an additional long-term funding source.

ФІНАНСОВО-ПРАВОВА СКЛАДОВА ЄВРОІНТЕГРАЦІЙНОГО МЕХАНІЗМУ УПРАВЛІННЯ ПРИРОДНИМИ РЕСУРСАМИ В ПУБЛІЧНІЙ СФЕРІ

The article is devoted to mechanisms of securitization of natural resources through issuance of securities (stocks, bonds, derivatives, etc.) by companies that use natural assets. The necessity of creation of territorial corporations on management of natural resources on the basis of public-private partnership in the process of decentralization of management of natural resources is substantiated. It has been proved that in order to attract investments into the natural assets utilization in the national economy, it is necessary to transform the structure of management of natural assets in such a way that, in the organizational aspect of financing of territorial corporations on the management of natural resources, the leading role, along with banking institutions, should play collective (joint) investment institutions (institutional investors). Territorial corporations for managing natural resources can be created on the basis of public-private partnership in the process of decentralization of environmental management. International experience in the creation and operation of such structures is extremely relevant for Ukraine in the context of further development of the financial market and European integration. The advantage of a joint investment institute overt the banks is that a professional institutional investor can provide not only full confidence in the professional management of investment portfolios, but also brokerage services in those cases where the ultimate beneficiary is able to professionally manage his own investment capital by making a purchase or sales of securities and acting as a financial intermediary. Particularly attractive this form of investment is for a foreign investor who can invest in the national sphere of the use of natural assets through a professional intermediary who is well-informed and know both the national and local (regional, municipal level) securities markets. One and the objectives of the development of specialized joint investment institutes, which will operate in parallel with the project companies, territorial corporations for the management of natural resources, may be joint (consolidated) investment of specific investment projects through the formation of appropriate target investment portfolios. That is, an appeal to the institution of joint investment in this case may be bilateral – from the investor side – in order to find the desired investment instrument (shares, bonds, investment certificates, shares of a corporate investment fund, mortgages as well privatization and commodity securities) and on the part of the issuer of securities in order to find an investor. Thus, the institution of joint investment can perform the function of professional fundraising, the formation of asset pools for business entities operating in the field of the use of natural assets. The article presents the institutional and financial component of the eurointegration mechanism of management of natural resources. The EU legal base in the sphere of joint investment is analyzed.

The Changing Structure Of The US Banking Business Model:, Deregulation: Innovation And The Financial Crisis

This article is centered on the idea that the changing structure of the US Banking Business Model offers an explanation to the recent financial crisis. It highlights the active role often played by banking regulationsand laws in the US as the roots of these radical changes as well as the rise of financial innovation especially the process of securitization as the beating heart of the new model. A particular attention is given to the responsive measures after the financial crisis especially the introduction of new regulations to restrain the risky behavior of the banking industry and their ability to transform the dominant banking model from an “Originate-to-Hold model” to the new “Originate-to-Distribute” one. The article is divided into two Sections, Section1 represent an attempt to discuss the importance of banking regulation and deregulation in changing the banking industry and the business model in the US. Section2 tries to explain the rise of financial innovations and the mechanism of securitization that underpinned the new model of banking development, then it takes a good look at the financial crisis and how the government responded to this crisis and what’s the effect in the present day on the business model of banks. Key Words- US Banking Model, Deregulation, financial innovations, Securitization, financial crisis.

On Some Recent Proposals of Public Debt Restructuring in the Eurozone

This paper considers the issue of sovereign debts in the Eurozone. The reasons for the reduction of public debt, which are quite strong in the present circumstances of slow growth, are briefly discussed with reference to EMU countries. Then the different possible strategies to reduce the public debt/GDP ratio while avoiding any form of debt restructuring are considered. The choice to cut public debt by means of a violent and unexpected upsurge of inflation, which in the past has often been the preferred solution, is not viable today in the Union. On the other side, alternative option for reducing the public debt by means of extraordinary finance instruments, such as wealth taxes, privatization of public companies and sale of public assets can assure only limited results. Thus the policy presently adopted in the EU, relying on the progressive accumulation of surpluses in the general government’s primary budget (the austerity solution), seems to be the only practicable exit. However the alternative of restructuring has been investigated with growing attention in the last few years. Two distinct perspectives have been followed. On one side a number of proposals deal with the issue of existing (legacy) debt. On the other one, several projects have been presented aimed to establish a permanent insolvency mechanism for sovereigns. The former group of projects wants to avoid the private sector involvement and are based on complex mechanism of securitization of future revenue of member states (seigniorage and taxes). There are reasons to doubt that they are something substantially different from the policies currently followed and, especially, that can be more favourable to growth. The latter group of proposals, concerning the institution of an ordered procedure of insolvency for sovereigns, are meant to make effective the no bail out principle, whose compliance has proved very difficult so far. The question is raised if this perspective is really realisable in the absence of any element of fiscal union.

Selling green militarization: The discursive (re)production of militarized conservation in the Virunga National Park, Democratic Republic of the Congo

In recent years, the militarization of nature conservation has intensified, especially in protected areas located in conflict zones or plagued by ‘poaching crises’. Such ‘green militarization’ is enabled by a range of discursive techniques that allow it to be seen as a ‘normal’ and ‘legitimate’ response. This article analyzes these techniques in relation to the Virunga National Park, located in the war-ridden east of the Democratic Republic of the Congo, where militarized approaches to conservation have a long lineage. It demonstrates that many of the discursive techniques that are currently at play show strong continuities with the past. These include moral boundary-drawing grounded in colonial tropes that accomplish the (racial) Othering of poachers and rebels, and the long-established practice of invoking states of emergency as part of wider mechanisms of securitization. However, the rise of neoliberal conservation, with its emphasis on marketing and marketization, has induced transformations in the employed discursive techniques. Notably, it has intensified the spectacularization of militarized conservation and anchored it in everyday consumer practices, by actively inviting individual supporters to directly fund militarized interventions, thus generating ‘militarization by consumption’. This shows that ‘green militarization’ is not only driven by the growing commodification of nature conservation, but is increasingly subject to commodification itself.

Ризики впровадження сек'юритизації активів в Україні

The article presents the results of a research on the activities aimed at streamlining the securitization in the European financial and institutional coordinates and orienting it to the post-crisis recovery by creating effective and prudent incentives for operating activities of the operators on the securitization market. The author defines the main purpose of active rehabilitation of securitization in the EU, which is reviving market crediting on the part of the sleeping European banking system, which even with the low interests and high refinancing rates fail to meet the needs of the real economy. Our study demonstrates that active recovery of the securitization market is considered today as one of the ways to create the Capital Markets Union, and should serve the purpose of greater integration in the European financial and institutional space, and extend the funding of the real economy through the creation of alternatives to bank lending. At the same time, it demonstrates certain contradictions of the current securitization both in the context of its actual influence on the operating activities of the banking institutions, and in the aspect of fundamental transformation of the system of financial intermediation caused by the mechanisms of securitization. The article presents conclusions concerning, on the one hand, the unavailability of Ukraine's financial and institutional environment to actively use the securitization mechanisms, and, on the other hand, their obvious inappropriateness in the context of the consolidation of the post-crisis development as for formal reasons, and for the reasons of underlying fundamental nature.

Eksistensi Hak Tanggungan dalam Kontrak Investasi Kolektif Efek Beragun Aset (KIK-EBA) sebagai Konsep Trusts

This research aims at discussing the problems concerning KIK-EBA agreement related to the existence of personality principles and ownership status of mortgage whose trust is secured in KIK-EBA. The problem discussed is related to any legal effects of the implementation of KIK-EBA as an agreement consisting of three parties on the existence of personality principles and related to the ownership status of mortgage in the securitization mechanism used in KIK-EBA. This was a normative research whose data were collected by using a library research method. The findings conclude that KIK-EBA is not an exception of personality principle; besides, since the formal condition of agreement is not fulfilled, KIK-EBA is null and void. The ownership of mortgage in KIK-EBA is still owned by the original creditor although purchase and sale of trust has occurred as a true sale in KIK-EBA.

Collateralized debt obligation in the mechanism of securitization of assets

The article examines the nature and features of the structure CDO. The characteristics of classic and synthetic securitization of assets. The expediency of implementation of collateralized debt obligation in the mechanism of securitization assets. The conditions of efficient CDO’s portfolio management in the сash flow transaction and market value transaction.