Monday, 22 October 2007

The brotherhood of the MLEC

Strangely enough, some bankers are not happy with the idea of Citi et al. manipulating the ABS market by waving assets into the MLEC at the wrong mark. From the FT:

A committee of top international bankers on Sunday warned that the proposed $75bn mortgage securities superfund must be transparent in its pricing of assets if it is to help restore market confidence.

The statement by the Institute of International Finance reflected concern that the superfund, which is backed by Citigroup, JPMorgan Chase and Bank of America, is proposing to buy assets from troubled investment vehicles at higher than true market prices. Josef Ackermann, chief executive of Deutsche Bank and chairman of the IIF, stressed the importance of “proper valuations” and the need for financial institutions to “take the hits”.

One does wonder if the 'one conduit to rule them all' plan is going anywhere...

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