Sunday, September 15, 2019

Universal default insurance and securitized firm debt monitoring

Obviously debt rating services become crucial for securitized debt Skin in the game thru performance screw claw back systems for rate setters that are in essence setting premiums At firm level No need for bank monitoring when markets will punish rating changes Firms shopping raters and insurers face a decentralized system Part of fire dome totalizator thru market activity not unilateral centralized administrative decision