TSI Congress 2008 –
Perspectives for the German ABS and credit market

Against the backdrop of the events in the international financial markets, the most popular topics were those relating to developments in the credit markets, new regulatory issues and political crisis management, refinancing via the ECB and quality standards for lending and securitisation.

In his opening speech, Jörg Asmussen, Parliamentary State Secretary at the Federal Ministry of Finance, gave prominence to the responsibility of the State to safeguard the stability of the financial system. However, he also pointed out that the financial market needs the guiding hand of the State more than before to establish rules and particuarly to implement them. The opening forum was moderated by Mr Gerhard Hofmann, Member of the Management Board, BVR. Jörg Asmussen was joined in the forum by Michael Reuther and Werner Taiber, members of the management boards at Commerzbank and WestLB respectively, and Michael Zlotnik, Head of Banking Ratings Europe, Middle East & Africa, Standard & Poor's. The evaluation of the German credit and securitisation market in the light of the financial market crisis was at the forefront of the discussion. Emphasis was placed on the fact that the regulatory environment and the advanced sector standards in the German ABS and credit market put the German securitisation market in a more positive position than other markets, especially those in which the credit crisis began. One of the conclusions was that the route of standardisation and transparency which has already been taken in Germany should be pursued consistently. The aim must be for German ABS to attain a position similar to that which the German Pfandbrief has enjoyed for decades in the covered bond market.

A lively, top-quality expert discussion also took place in the closing panel, which was moderated by Klaus-Friedrich Otto, editor-in-chief of the "Zeitschrift für das gesamte Kreditwesen". Hartmut Schauerte, Parliamentary State Secretary, Federal Ministry of Economics and Technology, Leo Dautzenberg, Chairman of the CDU/CSU parliamentary party in the Financial Committee, Ludwig Stiegler, SPD deputy parliamentary party leader, Michael Hüther, Director and Member of the Presiding Committee of the Institut der deutschen Wirtschaft Köln, discussed the impact of the credit crisis on corporate finance in Germany. All speakers acknowledged the quality of the German credit and securitisation market and called on sector members to play a role in maintaining that quality via TSI either by introducing relevant sector standards or by making constructive proposals for German securitisation legistlation to further strengthen the German securitisation market. Explicit reference was made to the current regulatory proposals, which were seen as a welcome move; however, it was stressed that every regulation must serve to make the securitisation market safer without having a detrimental effect on the market.

The current "rescue packages" and their regulatory justification were also discussed. All were agreed that these packages are necessary for reasons relating to financial market stability but beyond that everything must be done to avoid moral hazard.