Open AccessPreventing Another Crisis: Quality Data for MBS Markets
Author(s) -
Andrew Kumiega,
Ben Van Vliet,
Apostolos Xanthopoulos
Publication year - 2012
Publication title -
accounting and finance research
Language(s) - English
Resource type - Journals
eISSN - 1927-5994
pISSN - 1927-5986
DOI - 10.5430/afr.v1n1p162
Subject(s) - disintermediation , securitization , business , quality (philosophy) , government (linguistics) , financial crisis , process (computing) , financial market , industrial organization , finance , economics , computer science , linguistics , philosophy , epistemology , macroeconomics , operating system
Mortgage-backed securities and derivatives pricing and risk models often assume static input distributions. As real-world uncertainty increases, the need for real-time data updates becomes imperative. Quality standards for pool level data would ensure the orderly re-pricing of risk. Many industries abide by government mandated quality data standards. We argue that what the financial industry needs is what the NIST already provides to manufacturing and the NASS provides to agriculture. The financial industry has evolved and now needs continuous monitoring framework for the securitization process to control the complex mathematical models and technological systems that enable disintermediation in the mortgage markets.