Vivian van Breemen

183 5.1 Introduction The US capital markets attract investors globally, in part due to the effectiveness ot rfatnhsep Ua rSe mn cayr ko ef ti nr feogruml aatti ioonn d( eS vEeCl ,o2p0e1d9t)o. He no swuer ve etrh, et hper Go tr ee catti oRne coef sisni ov ensrt eo vr es aal ne dd that credit rating agencies (CRAs) assigned inflated credit ratings for tranches of private-label residential mortgage-backed securities (RMBS), resulting in the ma l .i, s2p0r i1c7i n; gF loyfntnh easnedt rGahnecnhte, s2(0s1e 8e ,) e. .Mg . a, Gn yr i fi fni vneestt oa rl .s, 2a0p1p3e ;aHr eedent oa tl . ,t 2o 0b1e6 a; wZ haor eu oe tf twhhe oubnrdoeur gl yhi tnlge gr iasl kasc it ni otnh pe aprot oi el soifnmt hoer tsgeacguersi ttirzaant isoanc tpi or on cs e(sSsEtCo , r2e0c 1o 4v e) .r I tnhvee lsat rogr es l l o at s e ses, realized as a result of the subprime mortgage crisis, that they were too 52 when they tried to appeal to securities laws and had to eventually bear huge losses.53 Ta tht er i bmuat sasb ldee ftaou l tosv eorno pt ht iemui ns tdi ce r lcyriendgi tc orlal at itne gr as l sf ot ar r tpi nr igv ai nt e t- hl aeb seul mRmMeBrS o fi s2s 0u 0e d7 in prior years54, caused policymakers to pass the Dodd-Frank Act55 aimed at improving the reliability of credit ratings. The Dodd-Frank established the SEC OB of fni cde Roaf t Ci nr ge dS iet rRv iactei nMg ,owr nhi incghs ts at irm( Du lBaRt eSd) at hned eKnrtorlyl Bo of nt wd oR antei nwg CARgAe ns c(yD (oKmBi Rn Ai o)n) i(nS t&oPt)h, eF iRt cMh BRSa triantgi ns g( Fmi tacrhk)e, ta nt od cMo mo opdeyt’es wI nivt he sSt ot arns dSaerrdv i&c eP(oMoor o’ sdGy l’ so)b. a l R a t i n g s In the United States, state laws offer lenders different levels of creditor protection. 52a l l Ionwv ee ds t oi nr vs ews teorres nt oo t c aobml emteon cr ee dae el amw st hu ei ti rwl iotshsi ens ao nc e sr teaciunr i(tsi zhaotri to)n t itmr aen spaecrtiioodn,s wa hs i lf ee dtehrea lmsaejcourri ti tyi eosf l ianwv se sot onrl ys discovered the nature of their claims only when this time period was already expired (Adelson, 2020). 53 Estimated at $1 trillion losses from 2007 through 2016 (Adelson, 2020). 54anOdnpeumrcihgahsteatrhgeume tnhaaitvethlyebseasloedssseoslewlyeroenatlhsoeiartytireibldust.e to the lack of understanding of these structured products 55SubDsoedcdti-oFnra1n5kGA. ct, 2010, Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Section 941 Chapter 5 - The Impact of Creditor Protection

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