Finance

The news of massive trading losses in JPMorgan's Chief Investment Office renewed calls for strict implementation of the Volcker Rule, the section of the Dodd-Frank Act restricting banks from proprietary trading. In my mind, the episode highlights the importance of intelligent and comprehensive risk-management procedures. While provisions such as the Volcker Rule can play a useful role, they cannot serve the desired purpose of mitigating risks to the financial system without robust risk-management standards enforced by regulators.

The cost of a college education continues to soar, and the interest rate on government-subsidized student loans is set to double. It would seem like a perfect recipe for more private lending and, by extension, for more securitization of private student loans, which has fallen sharply since the federal government took over this corner of the market two years ago.

Originators of private student loans can't seem to catch a break. Two years ago, the federal government stopped guaranteeing these loans, leaving them unsecured; more recently, there's been a push in Congress to make student loans dischargeable in bankruptcy. The loans are also attracting scrutiny from the recently empowered Consumer Finance Protection Bureau.

Brazil's housing market boom continues to make headlines. From January 2008 through April 2012, home prices in Sao Paulo and Rio de Janeiro jumped 135% and 169%, respectively, according to the FipeZap Index, which tracks prices every month in the country's seven biggest cities.

Mention cumulative charge-offs in single-digit basis points and premiums of more than 100 basis points for 'AAA'-rated bonds, and institutional investors are bound to scoff.

Despite the ongoing euro area debt crisis, European auto ABS have remained a stable and active asset class with continued investor interest for standard auto assets (auto loan and auto lease receivables to private individuals and SMEs) over the last few years. Over the past 18 months, issuance in this asset class has come predominantly from Germany, France and the U.K. More recently, Norwegian and Swiss receivables have entered this asset class.

Dealmakers, issuers and investors in Latin American structured finance are often quick to point out that they've been spared the worst brutalities of the global financial crisis and the more recent sovereign debt anxiety in Europe, with the exception of the nonbank real estate sector in Mexico.

Newly initiated foreclosures by the Federal Housing Administration (FHA) jumped 247% in April from a year earlier, while the overall number of foreclosure starts fell 3.1% in the same period.

The Carlyle Group isn’t the only market player seeing opportunity in adversity. In a move that might seem counterintuitive, in light of conditions in the European CLO market, 3i Debt Management is buying the majority of Invesco’s CLO business in the region.

CarMax Business Services is planning to sell an auto ABS worth $750 million. The joint bookrunners of the Class A, B, C and D notes are Barclays Capital, JPMorgan Securities and Wells Fargo Securities.

Bank partnerships with colleges and universities may not pay off for students, the U.S. Public Interest Research Group (PIRG) warned in a report published Wednesday.

The shadow banking system is down but not out. That's the conclusion reached by the Deloitte Center for Financial Services in a new report that examines the scope and the relevance of a sector that has received its fair share of blame for causing the financial crisis.Deloitte says that assets controlled by the shadow banking system — including ABS and MBS —have declined by more than 50% in the last four years, to $9.53 trillion at Dec. 31. As a result of this sharp decline, the traditional banking sector that four years ago was smaller than the shadow banking system is now roughly $8 trillion larger, according to Deloitte.

The Consumer Financial Protection Bureau Thursday afternoon served official notice that it is seeking comment on a range of issues — including the cost of potential litigation — and whether debt-to-income ratios should be used to determine a borrower’s “ability to repay” a residential loan.

3i Debt Management is buying the majority of Invesco’s European collateralized loan obligation business, the companies said today.

Freddie Mac reported 30- and 15-year fixed mortgage rates set new lows in the week ending May 31.

The Consumer Financial Protection Bureau (CFPB) has decided to delay the issuance of a final ‘Qualified Mortgage’ (QM) rule until after the Nov. 6 elections, industry officials told ASR sister publication National Mortgage News.

Fitch Ratings and Kroll Bond Ratings will rate the $1.1 billion CMBS conduit deal backed by 61 fixed-rate commercial mortgage loans that are secured by 80 properties.

How long can a good thing last? Writeoffs of credit card loans have already plunged below levels that issuers consider sustainable. Continued improvement in delinquencies points to a further dip in loss rates in the months ahead.

The commercial mortgage-backed security delinquency rate reached an all-time high in May at 10.04%, up 24 basis points from the prior month, according to the latest data from Trepp.

The president and chief executive of the Mortgage Bankers Association (MBA) David Stevens is stepping down after one year to become the president of SunTrust Mortgage.