Preventing Another Crisis: Quality Data for MBS Markets

Andrew Kumiega, Ben Van Vliet, Apostolos Xanthopoulos

Abstract


Mortgage-backed securities and derivatives pricing and risk models often assume static input distributions. As real-world uncertainty increases, the need for real-time data updates becomes imperative. Quality standards for pool level data would ensure the orderly re-pricing of risk. Many industries abide by government mandated quality data standards. We argue that what the financial industry needs is what the NIST already provides to manufacturing and the NASS provides to agriculture. The financial industry has evolved and now needs continuous monitoring framework for the securitization process to control the complex mathematical models and technological systems that enable disintermediation in the mortgage markets.


Full Text: PDF DOI: 10.5430/afr.v1n1p162

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Accounting and Finance Research
ISSN 1927-5986 (Print)   ISSN 1927-5994 (Online)

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