Page 337 - 2019 6th AFIS & ASMMA

My last slide. As I made all these slides, I thought if I was actually systems, are also important. The regulatory framework itself is not so
addressing the title of the panel, which is revitalization for long-term much conducive, but having a level playing field to ensure one instrument
fixed-rate bonds and secondary markets. My initial reaction to that title isn't disadvantageous versus another would be imperative, so that each
was, ‘Revitalization implies you have to bring back to life when someone instrument is assessed on its own merits. We’re seeing markets in countries
died somewhere. But housing needs have never died.’ Housing needs like Egypt, and Nigeria, where we've got really nascent private bond
have always been there and I think post the global financial crisis, it's not issuance, and these are a number of the things that have to be worked on.
so much that the funding needs died, it's more that things have changed
a lot. I think there's a lot of lessons being drawn. There are changes in the From my perspective, conferences like this are great. I think Korea was in
way securitization is done; it's much more focused on the funding need this position like Malaysia, about 30 to 40 years ago. So, you have been through
rather than the risk transfer. it, you learned the lessons and are able to share some of that experience with
new countries that are just embarking on this journey, such as Myanmar, Laos, Session II
New instruments such as Covered Bonds, which are, in fact, very old and Cambodia. I think it is hugely valuable, so thank you, KHFC, very
instruments, are gaining more global recognition after the financial crisis. much again for organizing this event. And thank you for your attention.
There are also changes at the overall regulatory level, such as some of
the new rules under Basel III, really focusing on liquidity management,
which is ultimately one of the big problems that led to the contagion » Moderator | Henny Sender
effects during the global financial crisis. A lot of that applies to the more Before I turn to Olivier, I just want to ask Simon one or two questions
developed economies. A lot of countries I worked in didn't suffer so on his thoughtful presentation. Simon, you talked about sort of dual
much from the global financial crisis, they didn't have that contagion. initiatives, one at a national level and at a level working with smaller
So it's more about building up from bottom-up housing markets, and in institutions, like in Rajasthan. For countries with vast populations, say
terms of the capital markets, or recommendations we would generally Nigeria, is it better to start small and then try to scale up? Or, is it better
make, are to focus on some of the basics of providing an efficient capital to work with the central government and start there?
market that can be channeled into affordable housing.

To this end, we need to have a solid yield curve built, ask central » Panelist | Simon Walley
banks and governments to have regular issuances of benchmarks at I'm pragmatic, so I have to say, whatever works, in all honesty. I also
different price points, and have secondary trading to get a lot of price do not believe in a cookie cutter solution. Just because something's
discovery. We also need investor education, and encourage presence of worked really well in Malaysia, don't export that wholesale and try and
rating agencies. I think Data transparency is critically important; the make it fit; you need to adapt everything to local conditions. Housing
more data you have, the better you can price the risk, and you can bring is often a preserve of local government, either municipal government
down the cost, particularly when you have data over a long period. or state level government. Nigeria, for instance, each of the 36 states
has responsibility to pass mortgage laws. So, if you want results on the
Generally, if you're looking at securitization, you almost need a whole ground, that's who you have to work with. The central government,
economic cycle of the upturn and downturn as to have a true picture of the whether it's in India or Nigeria, they can set the overall envelope and
risk and how investors might want to price mortgage-backed securities. they can provide guidance. But if you want results on the ground, you
Things like market infrastructure, including clearing and settlement have to work with the people who make the difference, which is often

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