The Securities and Exchange Commission has taken another step forward in trying to regulate the financial sector to avoid another credit crisis, this time adopting two new rules for banking institutions that package and sell asset-backed securities.
Failures in the ABS market, as it is commonly known, played a large role in the credit crisis three years ago. The SEC's new rules—the latest of many mandated by the Dodd-Frank Act—are intended to give investors more confidence and improve credit liquidity. They compel ABS issuers to map out and disclose their repurchase history, provide more information about their experience with investors who ...