A Study on Problems and Issues in Structured Finance

This research article evaluates the major features of structured finance instruments in India. It is argued that
structured finance ratings, though useful, have intrinsic limitations in fully measuring the risk of these products, even as their
complexity creates incentives to rely more heavily on ratings than for other rated securities. Investors and public authorities
need to consider this in their review of structured finance instruments and their markets. This research article aims to explore
the use and role of securitisation as main structured finance tool, and to evaluate the legal drawbacks, if any, that underlie the
arrangement of this financing techniques. This is done firstly by looking at the legal development of securitisation and at the
regulatory incentives that have more recently shaped the originate and distribute mode.