Securitization retention as a tool for incentives’ alignment

During the crisis, the operators' confidence in securitization has significantly diminished and the market has registered a sharp slowdown. Among the regulatory initiatives proposed to support this market, retention can play an important role: it may not be sufficient to reduce the information asymmetries and to encourage securitization, but – by requiring the direct and explicit involvement in the transaction of the originator – it can contribute to the realignment of incentives between the originator and the final investor.