Europe

Like most financial engineering techniques, securitisation is not without risk. The complexity inherent in securitisation can impair investors' ability to monitor risk, and competitive securitisation markets are prone to sharp declines in underwriting standards. Furthermore, off-balance sheet accounting treatment for securitisations coupled with guarantees from the issuer can make it challenging to assess exposures, encouraging issuers to take on excessive credit risk. Even the most ardent advocates of securitisation would accept that securitisation played an important role in the US subprime mortgage crisis that led to the global financial crisis of 2008.

The special act requiring entities that do business with the government to register in a special register of public sector partners (the register) – and to disclose their beneficial owners – has been in force in Slovakia for almost two and a half years. It is known informally as the anti-shell company act. This act was so innovative that it was only a matter of time before the sponsor of the act – the government of the Slovak Republic – would prepare a substantial amendment. Such an amendment was passed on June 27 2019.

Baker McKenzie partner Nick O’Donnell considers who or what is to blame for the fall in publicly-listed stocks worldwide – and why it’s unfair to say it’s the companies themselves