Declining margins in the traditional credit and mortgage businesses, higher risk provisioning and also the new Basel II regulations are forcing credit institutions to consolidate the quality control of their credit portfolios and at the same time adjust the portfolio risk diversification. Deutsche Bank does not expect any constraints to arise from Basel II for the securitization business, Markus Schabe commented to the German financial daily "BÃ¶rsenzeitung", rather the economic incentives are becoming more and more important. Leading German banks and some mortgage banks have already been doing securitization transactions above the hundred million mark for several years.
There is already a very long and distinctive culture of asset securitization in the United States. In Europe, the securitization business is increasingly becoming a strategic focus of credit institutions because it permits the bundling of own assets and the subsequent usually non-true sale to investors. As a result of this, a number of banks also take over the securitization of assets of other, usually smaller institutions. Today, medium-sized commercial banks and Landesbanken (regional savings banks) are engaging in this business, and â contrary to the current trend of downsizing â new departments are
The market study has shown that not only the usual categories of price and quality competition exist. The main issue, however, is the technological competition which has therefore been the focus of the study. As technology only rudimentarily supports the securitization business in most credit institutions, many processes, such as selecting assets for a transaction or reporting to the banking supervision and rating agencies, are handled manually. This however, rarely meets the marketsâ requirements of time and quality. Therefore a competitive edge can be gained by improving time-to-market and quality through
For more than four years, Acrys Consult, a medium-sized management consultancy with offices in Frankfurt, New York and Zurich has been advising credit institutions in strategic, banking and technological issues. Among Acrys' clients are major domestic and foreign banks, state banks, savings banks, mortgage banks as well as depositary banks. Acrys is offering PoolDesigner, a tool to support the securitization process, which is based on a software developed for the MBS business of a major German bank.