European securitisation issuance (EUR billion)  Source: European Securitisation Forum  9  See “Report of the Financial Stability Forum on Enhancing Market and Institutional Resilience”, FSF, April 2008. 8  BIS Review 68/2008  Chart 2. Funded issuance by collateral (EUR billion; by month)  Source: JP Morgan  Chart 3. European ABS spreads (relative to 3-month Euribor)  Source: JP Morgan  BIS Review 68/2008  9  Chart 4. Evolution of collateral held with the Eurosystem by asset type  Source: ECB  Chart 5. European securitised products: Publicly placed or privately retained? (EUR billion)  Source: Citi. European Secutitised Products. Strategy Analysis. Securitised Products. Europe 7 March 2008. Secondary Source: Bloomberg, International Insider, Informa GM, IFR, Citi. Note: Publicly-placed issuance includes only deals that have been publicly marketed. Private/Retained issuance includes deals that have been privately-placed or retained by the originator. The Private/Retained issuance figures include all such deals to Citi’s knowledge, but may not include such deals where there is no public information available. For some deals priced since August 2007 it has not been clear whether the deal has been fully placed. 10  BIS Review 68/2008
Having a common survey instrument would promote benchmarking of, and accountability for, progress on culture and behavior. A core element of any firm’s mission and culture must be a respect for law. Federal Reserve guidance advises that banks should strive to “[m]aintain a corporate culture that emphasizes the importance of compliance with laws and regulations and consumer protection.” 4 To maintain such a culture, senior leaders must promote effective self-policing. If audit uncovers an instance of fraud in one unit, the firm’s leadership should ask, “Where else could this behavior occur?” If the press reports fraud at a competitor in a particular business line, the same self-assessment should apply. “Could this happen to us, could we have a similar problem here?” When fraud is detected, boards and senior leaders must ensure that they are informed promptly, and that a thorough inquiry is undertaken at once. The senior leaders of financial firms, and those who report to them, must also be proactive in reporting illegal or unethical activity. Early self-reporting sends a powerful message to employees and to regulators about a firm’s respect for law. This is one important reason why those who selfreport in a timely way should be treated preferentially, compared to those that drag their feet and whose bad behaviors are only uncovered by enforcement investigations. How will a firm know if it is making real progress? Not having to plead guilty to felony charges or being assessed large fines is a good start.