Proposed regulatory and accounting changes hung like a tropical storm cloud over Paradise Island, Bahamas, where the ninth annual Information Management Network ABS East conference unfolded last week.

Despite this, speakers spun a positive pitch early on, as evidenced by the tongue-in-cheek "The Good, the Bad and the Ugly" theme of the general opening session - updated to Enron, Tyco and Worldcom - which featured the infamous movie with dubbed voiceovers from session facilitator and Moody's Investors Service Senior Managing Director Brian Clarkson.

Fitch Ratings Managing Director J. Douglas Murray listed ten reasons why people should be upbeat in spite of the doom and gloom surrounding the industry. His number one? "It's October and we're back in the Bahamas."

While there was cautious optimism that, in the end, most aspects of the securitization market would weather the storm, Clarkson admitted that the ABS market suffered from a common fundamental problem - accountability. Stating that all conference participants were guilty of oversight to some degree, Clarkson highlighted a recent study, in which 87% of nearly 1,900 issuer respondents did not disclose all of their ratings triggers within Securities & Exchange Commission filings. Such undisclosed ratings triggers played a major role in the rapid downward spiral of Enron, he said.

And as a result of "Enronitis," Credit Suisse First Boston Managing Director Joe Donovan argued there is "unnecessary focus" on securitization. Other participants said the fallout has led to a clamor from the government and the general public for "regulatory activism."

The strongest solution for the industry, said Vernon Wright, MBNA Bank America senior vice chairman and CFO, is education and transparency. Pointing out the revision of the Durbin-Delahunt bill, which threatened the very fundamentals of true sale, Wright stressed that "we must teach legislators of the nuances of ABS and SPEs. A haste for solutions can lead to inefficient laws. And if we don't protect ourselves, nobody else will."

With the economy still in a funk, the housing sector became a big chunk of the conference's early discussions. The inevitable question of whether there is a housing bubble was broached during the opening panel and in the subsequent real estate related sessions. (see pgs. 10, 12)

Other talk revolved around various antipredatory lending laws that could impact the ability of lenders to originate mortgages in certain states. Also mentioned was the fact that there has been more volatility in terms of rating activity with CDO triple-A downgrades cited time and again. "There has been a fundamental change in what Triple-A' means," said CIFG's Reifsnyder.

Despite the looming storms on the outskirts of the industry, panelists cited one silver lining, the American Securitization Forum (ASF), which has brought the securitization community together to deal with pressing regulatory issues.

Following the panel discussions, Wednesday's ceremonies were highlighted by the evening's beachside concert performance by Steel Pulse, who definitely lived up to the billing as numerous ABS players were seen dancing to the energetic and bass-heavy reggae jam. At the marina, numerous shops, notably CSFB and United Capital Markets, hosted parties aboard yachts. UCM's CEO John Devaney had sailed his mobile trading floor, Positive Carry, from its base in Boca Raton, Fla. Not to be outdone, CSFB reportedly had a fully functional helicopter on its yacht in case the need arose for a quick getaway.

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