| Summary: | 博士 === 國立中正大學 === 法律系研究所 === 104 === Securitization is a measure of structured finance that must joint commercial banking, investment banking, asset management institutions (such as mutual funds, hedge funds, private equity funds, etc.), special purpose vehicle (SPV), insurance companies, and other related agencies to participate. It confuses the traditional separation of banking and securities activities that it is hard to be supervised by related financial authorities. U.S. subprime mortgage crisis was resulted from the presence of conflict of interest involving the information asymmetry between securitization participants and investors. Moreover, entered each participant’s inherent field too deeply, systematic risk is easy to bring out when a participant faces insolvency or bankruptcy. In the end, Federal Government bailouts financial institutions to end “too big to fail” by using taxpayers’ fund. Then, the market would face an adverse selection problem.
This research primarily explores the regulatory framework of conflicts of interest in securitization. Focusing on U.S. financial regulatory reform post the subprime crisis, by which discusses the involved regulatory scheme of securitization participants that contributed to conflicts of interest in securitization and shadow banking that created the source of systemic risk for the financial system.
The structure of this research comprises eight major parts. Part one illustrates incentives, methodologies and realms of the research. Part two discusses definition, fundamental, patterns, pros and cons of securitization and reminisces its short developing history. Part three explores meaning of the term “conflicts of interest” from theoretical viewpoints and compares the difference between “moral hazard”, “adverse selection” and “conflicts of interest”, therefore observe the various participants involved in conflicts of interest in the securitization process from the micro-level. Part four analyzes regulatory framework of conflicts of interest in securitization, especially the given provisions in the “Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010”, including “Volcker rule” and “Conflicts of Interest Rule”. Part five probes conflicts of interest problems in the credit rating agencies that result in the financial crisis in 2008, then analyzes financial regulations addressing these problems. Part six explains what the shadow banking is, by providing definitions in a literature review, and also a comparison of shadow banking and traditional banking, as well as composition of shadow bank, then, introduces financial regulations addressing problems of shadow banking. Part seven concludes aforementioned reasoning by which to suggest a tentative scheme for Taiwan’s legislators in conducting financial reform about preventing the conflicts of interest in securitization in the future. Part eight concludes my opinion in this article as a explain theory to deepen the doctrine and practice of Taiwan’s financial law.
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