Although the consumer ABS market is 3.7% ahead of its 2010 pace at the midyear point with $55.6 billion of new consumer ABS issued in 1 H11, several macroeconomic factors continue to plague the sector, according to a Wells Fargo Securities report released yesterday.

The weak economy and housing market, as well as the threat of impending regulatory reform, lack of consumer confidence, and structural changes to securitization, were among the issues listed as affecting ABS. The report also stated that because of a combination of these factors, outstanding consumer ABS has decreased by 25% since 2007. Wells Fargo analysts believe that this market reduction has damaged both investor interest as well as the availability of liquidity.

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