Securitization bankers in the runup to the 2008 financial crisis often took comfort in the technical terminology and alphabet soup of acronyms that characterized the business of repackaging loans and other assets into salable bonds. Now they're reverting to much more accessible wording in their efforts to fight back against new rules designed to make the industry safer.
Take Ian Bell, the head of industry standards group Prime Collateralised Securities. Speaking before a European Parliament committee, he used a food safety analogy to criticize proposals to make firms hold on to a bigger chunk of the transactions they originate.
The industry that gained mainstream attention by championing financial products as complex as the terminology that obscured their risks now takes strides to reinvent itself, and even some policymakers are seeing the benefits of plain speech. Yves Mersch of the European Central Bank, which is the principal advocate of a revival of a market it thinks can help support lending to businesses, called on the weather to take aim at proposed capital regulations for the notes.
There's a certain irony that an industry that became the posterchild for the precrisis financial engineering of Wall Street wizards is trying to justify its existence with simplistic metaphors. Bankers will argue that the plainness is warranted in their push to revive Europe's ABS market as a key conduit for financing business and boosting the continent's lagging economy.
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