‘Analysis of the TARP: Challenges and Opportunities for Your Business’

In one paragraph of this seven-page “Client Advisory,” lawyers of Katten Muchin Rosenman LLP suggest that a “possible exit strategy for TARP assets would involve the use of special purpose vehicles to issue obligations backed by the TARP assets in a structured finance or covered bond transaction….  Presumably, the Treasury Department would be mindful of the need to address many of the perceived deficiencies of previous structured finance transactions, such as insufficient transparency, moral hazard caused by originators not retaining enough “skin in the game”, and overly complex structures.  Notably, covered bonds issuances, popular in Europe and recently promoted by the Treasury Department and FDIC in recent regulatory guidance, squarely address many of these issues.”   The advisory contemplates that current regulatory guidance would need to be expanded or changed in order to make this possible.

To read this “Client Advisory” on Katten Muchin’s website, click here.