A just-released position paper issued by XBRL US organization explains exactly how trust can be restored in the mortgage-backed (MBS) securities market. The concept is simple and the technology exists: detail every loan from cradle to grave in an automated form that is easy to analyze so that investors can value the actual cash flows of these investments and untangle the good from the bad.
Written by EDGAR Online President and CEO Philip Moyer, the position paper shows exactly how standardization in XBRL can benefit industry and government leaders working to alleviate the current financial crisis.
The industry is awash in a sea of incomparable data,” writes Moyer, “but we don’t need to invent another reporting standard to solve this problem.” Download the full text.
“The technology and information necessary to make the data reporting standards a reality in this market already exists and can be implemented for a relatively low overall cost by most market participants. Every member of the MBS supply chain is bearing the cost of broken information standards already. The market needs digital transparency to unlock the great cash flows frozen in the MBS market. Standardized information can shine a bright light on what is wrong and more importantly, on all that is right with the re-securitization market.”
The paper is addressed to those industry leaders, regulators, legislators, and investors, who want to define transparency-and restore trust. The paper was a key resource for the XBRL US in its testimony March 11 before the Domestic Policy Subcommittee hearing of the Oversight and Government Reform Committee. The hearing, on the Treasury Department’s oversight of the use of funds by financial institutions under the Troubled Asset Relief Program (TARP), addressed data collection procedures to monitor the use of funds and the ability of the Treasury to detect and prevent waste and misuse of funds.
XBRL US invites comments to and participation in the solution offered to fix the broken information ecosystem that is plaguing the MBS market.
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