SECURITIZATION IN THE UNITED STATES OF AMERICA AND THE EUROPEAN UNION: DOES IT WORK IN TURKEY?

Securitization is a process in which different assets or portfolios of cash own generating securities are pooled together and then sold to third parties. Recent global financial crisis demonstrate the need to create and implement regulatory frameworks that balance financial markets. In this context, Europeans have watched in bewilderment and amazement as the USA mortgage market cratered. The purpose of this article is to research the differences of securitisation between the USA and the European Union from a macroeconomic perspective. There is considerable evidence that securitisation in the USA and the EU indicate structural differences. Securitisation in most of the economies in the world is an attractive and potentially large source of long-term funding for mortgage markets. In addition, securitisation can be found both in developed and in emerging countries. Every year, all over the world, approximately US$5 trillion worth of funds are transferred to homebuyers over the capital markets. The lack of a modern housing finance system in Turkey prevents from taking advantage of these widely available funds and services. In this regard, another objective is to capture key trends for the securitisation in Turkey via secondary mortgage markets. The Mortgage Law was approved in March 2007 by the Turkish Grand Nation Assembly. This law encourages securitisations of mortgage loans in the best advantages of the financial systems and the borrowers. Because of its benefits; further encouragement should be provided for promoting securitisation in Turkey. [ABSTRACT FROM AUTHOR]