Monolines said they are still hopeful that they can find a niche in Europe via the municipal bond market, said speakers at the monoline panel at Information Management Network's second annual European CLOs, Structured Credit Products, and Credit Derivatives Summit.

Despite the hard times insurers have weathered over the past year, conference panelists said that monolines are still interested in resuming securitization activity. This could happen once the bond insurers have figured out a more conservative approach to the market that incorporates new and adapted methodologies.

Any future activity will hinge on how regulatory changes take hold. Iain Barbour, managing director of MBIA U.K., added that "fair value accounting" will have more relevance to the current mark-to-marketaccounting, thus helping monolines guarantee future structured finance products, such as credit default swaps.

Currently, he said that these losses cannot be crystallized in the normal course of business.

(c) 2008 Asset Securitization Report and SourceMedia, Inc. All Rights Reserved.

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