The Basel committee securitization group released its second working paper on securitization last month, inviting industry comments on the proposed changes until the cut-off date of Dec. 20, 2002. The full consultative paper should be ready for public market comment sometime next spring.

According to analysts at Morgan Stanley, the changes included on this second tour represent a significant step forward for the treatment of securitizations in the Basel 2 proposals. In particular, analysts pointed to refinements in the treatment of transactions with early amortization triggers and of liquidity facilities provided to conduits.

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