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Barclays'
Massive Loan Pool Eludes Notice
The
Street.com - April 20, 2009
by Dan Freed
A
more than $30 billion pool of corporate loans
managed by Barclays has slipped by virtually
unnoticed, but merits close scrutiny as it
sheds light on central bank lending standards
loosened by regulators’ fight against
the global economic downturn…
“The rating agencies have been fairly well discredited
for structured products, and I
advocate that their NRSRO [Nationally Recognized Statistical
Rating Organization] designation be revoked,” wrote
Janet Tavakoli, president of Tavakoli Structured Finance, in
an email to TheStreet.com.
The
problem is that there is nothing to replace the rating agencies,
Tavakoli continues. “The capital markets, regulatory agencies
and Congress indulge in the hypocrisy that no one trusts the
rating agencies, but we’ll use the ratings to determine
how we provide liquidity in the capital markets,” she says.
Further,
Tavakoli worries the central banks could be stuck with assts worth
far less than they think. “It’s kind
of disturbing that the Fed and ECB have decided to take on this
kind of collateral, and they’re really not equipped to
scrub it, she said in a follow-up phone interview.
End of Excerpt
Janet
Tavakoli is the president of Tavakoli Structured Finance,
a Chicago-based firm that provides consulting to financial institutions
and institutional investors. Ms. Tavakoli has more than 20 years
of experience in senior investment banking positions, trading,
structuring and marketing structured financial products. She
is a former adjunct professor of derivatives at the University
of Chicago's Graduate School of Business. She is the author of: Credit
Derivatives & Synthetic Structures (John
Wiley & Sons,
1998, 2001), Structured
Finance & Collateralized Debt Obligations (John
Wiley & Sons, 2008), and
Dear
Mr. Buffett: What An Investor Learns 1,269 Miles
From Wall Street (John
Wiley & Sons
January 2009)
Clients
of Tavakoli Structured Finance
have the benefit of proprietary consultation, which is
not available in any other paid or public forum. Clients
also commission proprietary research and analysis.
TSF
makes some information available to the general public. Please
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