Presentation is loading. Please wait.

Presentation is loading. Please wait.

The Long-Term Value of Mortgages and the Benefits of Late-Mover advantage for Emerging European Markets TONI MOSS / EuroCatalyst BV Bucharest 22 September.

Similar presentations


Presentation on theme: "The Long-Term Value of Mortgages and the Benefits of Late-Mover advantage for Emerging European Markets TONI MOSS / EuroCatalyst BV Bucharest 22 September."— Presentation transcript:

1 The Long-Term Value of Mortgages and the Benefits of Late-Mover advantage for Emerging European Markets TONI MOSS / EuroCatalyst BV Bucharest 22 September 2004

2 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV Who is EuroCatalyst Toni Moss: American citizen, Dutch resident Education: B.A. Women’s Studies and Psychology (SDSU) Professional background: Corporate intelligence, investment banking (securitisation, non-performing loans and asset disposition, servicing and asset management) Shirley Jackson: Canadian citizen, Tokyo resident Education: Master’s degree, International Relations and Middle Eastern studies (Georgetown) Professional background: Editor, The Japan Times (20 years)

3 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV What is EuroCatalyst?  Dutch-based advisory, market positioning and investor relations firm  Work with clients whose activities span the mortgage value chain  Global reach (US/Asia/Europe) local focus (Europe)  Generate, brand and position new ideas for housing finance and property development

4 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV We have an image problem: What other people call us  A venture capital firm…without the capital - Carlyle Group  A think tank…without the academics - Alexander Batchvarov, Merrill Lynch, Iain Barbour, Commerzbank Securities  A walking idea laboratory - Alan Paterson, Citigroup  The Davos of the mortgage industry - Genworth Financial Services  Community architects - Esther Dyson  Utopian - Jon Hay, Structured Finance International  The gals that made covered bonds sexy – Ian Kerr, EuroWeek  The Tipping Point - Mark Thompson, e-Schwab  Hopeless workaholics - our mothers

5 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV Where did I get these crazy ideas in the first place?

6 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV What are our activities… 1.We bring together the most important CONTENT relating to mortgage markets 2.We identify and interpret the most important CONTEXT for understanding the markets 3.We facilitate COMMUNICATION across, within and among market sectors 4.We establish CONNECTIONS between ideas, individuals and institutions 5.We build COMMUNITY between market players 6.We accelerate CONVERGENCE within and outside of the sector

7 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV …and how do they impact European mortgage markets? We are the founders, executive producers and co-sponsors of a pan-European peer-to-peer mortgage industry “think tank”. The event acts as a catalyst to:  reposition the role and importance of European mortgage markets;  build an independent, neutral community of market participants to exchange ideas and explore new possibilities and survival strategies  Focus on commercial possibilities and realities – leave political implications to the political process  Drive markets toward best products and practices  and establish a new community of market participants upon which the pan-European industry would develop

8 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV What fundamental assumptions drove the event? An idea has no power without a context. The context for understanding European mortgage markets is globalisation – it is the missing dialogue. One is neither for not against globalisation – it is no longer a choice. Housing is local, yet funding is global. The global aspect will not change. Therefore, the local aspects must change. If they don’t change, local markets will be left behind (economic dislocation) The more economies localise, the more politics localise. Regulation cannot possibly keep up with the pace of change - so it is up to market players to find their own solutions until regulators catch up. Globalisation demands integration, not isolation.

9 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV EU mortgage market integration In 2001, we invited key market players to join us in a neutral and independent dialogue… 1.We chose Madrid for the location of the event, which was held in September, 2002 and themed, “Will European mortgage markets survive globalisation?” 2.We posed the question, “…suppose one could integrate European mortgage markets – what might that look like?” 3.We pointed out similarities between markets rather than argue their differences, and systematically showed how mortgage markets vary in form but not function. 4.The event focus was on the entire value chain – it was not a capital markets event. 5.Within the value chain, we incorporated all funding tools (covered bonds, securitisation and whole loan sales and trades) 6.We knew that funding was the pressure point holding back the industry (the battle of the bonds)

10 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV The original community: EuroCatalyst 2002 Madrid We brought everyone together in one place, at one time, for the first time, on an equal and level playing field: EMF - European Mortgage Federation CML - Council of Mortgage Lenders (UK) BSA - Building Societies Association (UK) VDH - Association of German Mortgage Banks CECA – Association of Spanish Mortgage Banks AHE – Association of Spanish Mortgage lenders Realkreditraedet – the Association of Danish Mortgage Banks TeGOVA – The European Group of Valuers IUHF – International Union of Housing Finance All three rating agencies: Standard & Poor’s, Moody’s Investors Services, FitchRatings All investment Banks Central Bankers Regulators Market players (banks, insurance companies, lenders) Covered bond issuers, mortgage bond issuers and issuers of Mortgage-Backed Securities Their respective investors Key service providers (Intermediaries, Servicers, Advisors, Structurers and Arrangers) Credit enhancers and Title insurers All related trade publications in all EU countries and we emphasized a pan-European mortgage community, not a pan European industry (it does not exist).

11 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV What did our audience response tell us? Does globalisation have an impact on European mortgage markets Do you consider servicing a strategic asset or competitive advantage? Will European mortgage markets survive globalisation? How long will it take to achieve cross-border lending? Is secondary market integration Possible? Will securitisation become a viable funding tool in Europe? Would you return to this event again? Yes:2%No:98% Yes:4%No:96% Yes:100% Never:20%10 yrs:30% Yes:8%No:92% Yes:12%No:78% Out of 275 participants, 203 responded. Of the 203 responses, 202 checked “definitely”

12 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV What happened afterwards?  The following month The Economist wrote an extensive article entitled, “The Property Bubble?” citing the disconnect between housing as a local activity and its funding as a global activity to illustrate inflationary concerns on housing prices and its potential impact  3 months later the EU DG Internal Markets formed a study group on European mortgage markets to inventory obstacles to cross-border lending  6 months later the European Mortgage Federation commissioned the Mercer Oliver Wyman study on European mortgage market integration  7 months later the European Mortgage Federation created a new conference on European Mortgage Markets (aimed at regulatory issues), every trade organisation supplemented their national market events with “pan-European” or international focus; and every national banking association dedicated sections of their general banking event to mortgage-related topics.  1 year later EuroMoney Conferences created a pan-European event on covered bonds  Today there are more than 8 “pan-European” events on mortgage-related topics

13 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV Benefits of late-mover advantage  Playing scrabble without the vowels – you haven’t missed much  Ratings criteria is more well-defined  We know which products work well and how to fund them  The benefit of hindsight with regard to frameworks  Global investor base is well-developed and continues to grow (fixed- income is awash with capital)  The understanding and management of risk is far more advanced with cost-effective tools now available  The flow of good information is now open and improving every day  Trade organisations now address the entire value chain  Now two strong capital market lobbies representing the markets (the ESF and the EMF)  Minimal legacy technology to contend with – can build more cheaply today or acquire affordable and reliable systems

14 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV Where are we today  Move the event each year according to what we believe is the market most representing change or opportunity  2003 was held in Lisbon, the theme was “Competition and Convergence in European mortgage markets and products”  2004: Live from Berlin on October 11 – 13  Theme: Growth, Integration and Differentiation  New issues: Master servicing, non-performing loans and aset disposition

15 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV GLOBALISATION “ If globalisation were a sport, it would be the 100-meter dash over, and over, and over. And no matter how many times you race, you will have to race again the next day.” Thomas Friedman, The Lexus and the Olive Tree

16 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV FACTORS OF CHANGE / TRENDS IN EUROPE: SERVICING

17 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV The Euro in context Why was the Euro created?  A response to globalisation  The need to gain economies of scale  The only currency without a nation associated with it ($ £¥)  They built the roof first – and now struggle to build the foundation underneath

18 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV The role of a bank, and the long-term value of mortgages

19 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV The historic role of a bank

20 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV The current role of a bank

21 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV The role of servicing

22 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV … the axis of lending activities A model from natureA model to implement

23 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV © EuroCatalyst bv

24 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV Outsourcing and Third-Party Administration

25 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV Cross-Border Administration: Initial Attempts

26 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV World-Class: Models to learn from Funding The Danish market model (good for society, difficult to make profits, world-class ALM) Healthy Competition The UK and Dutch mortgage market Distribution The US Market Servicing as a national market utility / Straight through processing VP Denmark Servicing as an individual lender: Efficiency Europe: BHW Bausparkasse / US: Countrywide Working around legislation and making a market UK structured covered bonds / Bank of Ireland Mortgage product innovation Australia

27 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV A prediction for Romania: 2008

28 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV CAPITAL DARWINISM “It is not the strongest of the species that survives, nor the most intelligent; it is the one that is most adaptable to change.” Charles Darwin ( )

29 BUCHAREST 22 SEPT 2004THE REAL ESTATE FORUM - THIRD EDITION / TONI MOSS – EUROCATALYST BV You already know this…


Download ppt "The Long-Term Value of Mortgages and the Benefits of Late-Mover advantage for Emerging European Markets TONI MOSS / EuroCatalyst BV Bucharest 22 September."

Similar presentations


Ads by Google