For example, partly in reaction to the report of the second Counterparty Risk Management Policy Group, the Federal Reserve Bank of New York recently hosted a meeting with representatives of major participants in the credit default swap market, as well as with their domestic and international supervisors, to discuss a range of issues, including market practices with regard to assignments of trades and operational issues associated with confirmation backlogs.
Let me take an example of residential mortgagebacked securities (RMBSs), securitized products that have residential mortgages as underlying assets, which triggered the global financial crisis. For individual investors, the risks seem to be diversified, thanks to securitization technology, but, if housing prices decline on national basis, the risk diversification effect will not work.