A panel led by Treasury Secretary Henry Paulson is seeking a major overhaul of rules affecting mortgage lenders and a credit market decimated by risky subprime loans and loose oversight, the Wall Street Journal reports. Among panel recommendations to be released today:
- Strengthen mortgage lender and broker oversight
- Establish licensing standards for mortgage brokers
- Require credit-rating firms to differentiate between complex-structured products and conventional bonds
- Require issuers of mortgage-backed securities to reveal "the level and scope of due diligence" and the underlying assets of the securities
- Require disclosure of whether "issuers have shopped for ratings"
- Urge global bank regulators to require banks hold sufficient capital to cover risky investments
- Update standards for how banks manage liquidity