It is fair to say that the situation in global credit markets is more severe and likely to be more prolonged than any of us would have predicted just a few months ago. It is still impossible to tell where things will end up but it is quite clear that the landscape has already changed significantly, with many market players having already exited the market or reshaped their businesses.

Securitisation has offered significant benefits to the Australian financial system, including lower costs to borrowers, funding and capital management flexibility to institutions and alternative investment options to investors. And the credit story of Australian mortgages is an extremely strong one. And yet we nevertheless find ourselves where we are.

This raises a number of questions. Do we have a model that is sustainable and resilient to future shocks? When the market returns what will replace the offshore investor base that has largely disappeared through the dissolution of the SIVs? And if the market doesn’t return soon do we run the risk of unwinding 20 years of development, something that cannot easily be recreated?

These are questions we wish to explore with our members. At the time of writing we are about to commence a consultation process focused on canvassing members’ ideas on these issues. I am excited about this process as it’s the first time we’ve conducted an interactive process in quite this way. We hope that it forms a model for how we deal with issues in the future and we are interested in your feedback about the process.

In order to meet the challenges facing the industry and to best serve our members, greater focus is required on consultation with members and communication with and education of key stakeholders including regulators, government and the media. The ASF to date has been a voluntary organisation achieving its success relying on the contributions of the employees of its member organisations. This is not a sustainable model to achieve what we need to achieve. Consequently, earlier this year we took the view that dedicated resources were necessary.

I was pleased to announce recently the appointment of Greg Medcraft as chief executive officer of the ASF. Greg was, until recently, the global head of securitisation for Société Générale, operating out of New York. Prior to moving to New York some 10 years ago Greg was responsible for building the securitisation business in Australia for Société Générale. Importantly he was a co-founder of the American Securitisation Forum and was its chairman until July last year. In recognition of his contribution to the American Securitisation Forum and the industry in general he was made chairman emeritus and remains on their management committee.

I am also pleased to announce the recent election of Stuart Fuller and Patrick Tuttle as co deputy chairs of the ASF. The creation of deputy chairs offers depth and succession for the chairman’s role and an increased layer of governance as we move into having dedicated staff. The chairman, together with the two deputy chairs, form the remuneration committee.

Phil Vernon
Chairman, ASF