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EurOrient chairman Ron Nechemia Authors Techincal Financial Article on Asset Securitization
 

EurOrient chairman Ron Nechemia Authors Techincal Financial Article on Asset Securitization

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    EurOrient chairman Ron Nechemia Authors Techincal Financial Article on Asset Securitization EurOrient chairman Ron Nechemia Authors Techincal Financial Article on Asset Securitization Document Transcript

    • 21 April 2009 Media ContactEFG-US-20090421-1 Jeff Mustard EurOrient Financial Group 818-206-5322MEDIA ANNOUNCEMENT jeff.mustard@eurorient.org Ron Nechemia, Chairman of EurOrient Financial Group, Authors Technical Financial Article on History of Asset Securitization for China’s Leading Financial Publication International Finance MagazineLOS ANGELES, CALIF.: 21 April 2009 – Offered in a new article authored by one of the world’sleading international financial authorities, Mr. Nechemia the Chairman of the Board of Directors ofEurOrient Financial Group (“EurOrient”), policy makers, financial practitioners and investors will be bothintrigued and enlightened about potential remedies for what began as a financial crisis in North America inAugust 2007 that has now developed into a global economic meltdown. Moreover, anyone interested inbetter understanding the Subprime Lending Crisis and how it evolved will be treated to an insightfulhistorical account offered in Mr. Nechemia’s new article published in China’s leading FinancialPublication.In his article, Mr. Nechemia argues that the rapid innovation in asset securitization technology is the rootcause of contemporary financial market development of the past three decades. Published by InternationalFinance Magazine (“IFM”), Mr. Nechemia observes that, “the failures in today’s financial markets can betraced to the creation and Frankenstein-like mangling and market-butchering of the financial productknown as Asset Securitization, or what the public at large has recently come to learn is Subprime Lendingthat triggered the global financial meltdown.”In his recently published article, Asset Securitization: Revolution, Evolution, Devolution. The Rise and Fallof the Most Important Financial Instrument in Banking, Mr. Nechemia traces the success of AssetSecuritization back to its introduction in the early 70s and how, “this financial instrument and the variouspermutations it morphed into during a more than 30-year period enabled the unprecedented growth ofcapital and financial markets in both the United States and abroad.” Page 1 of 6
    • Following the publication of two prior question- and-answer-style interviews, the first given by Mr.Nechemia for International Finance Magazine published in May 2008 in an article titled, Guard Againstthe Influence Brought by Subprime Landing Crisis, at which time Mr. Nechemia announced that he saw asystemic financial crisis brewing and warned that in the months to come the United States was likely toface a once-in-a-lifetime financial crisis, an oil shock, sharply declining consumer confidence and,ultimately, a deep recession. In that article he also foretold of homeowners defaulting on mortgages,trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial systemshuddering to a halt. The second interview, a Cover Story published in March 2009, “At the Epicenter:Where the Financial System Meets the Real Economy,” Mr. Nechemia offers observations and insightfulcommentary regarding the critical financial issues as it relates to the world’s global financial crisis, itsimpact on China, recommended reforms and action steps, along with forecasts of the Chinese economy inthe year to come.International Finance Magazine is China’s only financial publication supervised by the China Council forthe Promotion of International Trade. Following the excellent reception and accuracy of his marketcommentary, the Magazine, which is devoted to national and international investment and financingmarkets, asked Mr. Nechemia to write a series of financial and investment-related articles. Says Mrs.Luyang Li, Editor-in-Chief, of International Finance Magazine. “Mr. Nechemia’s scholarly and accurateanalysis in his prior interviews were so insightful, we asked him if he would write a series of articles thatsheds light on the reasons that led to the current financial crisis in North America that has now developedinto a global economic meltdown.”“For this new article, Mr. Nechemia suggested he’d like to provide a thoughtful, technical paper for thecrisis starting with a historical overview of Asset Securitization, the financial instrument, according to himthat has been recognized by eminent academics as the most important engine of reform in our financialsystem.” Mr. Nechemia presents the case that Asset Securitization has emerged in recent times and isviewed as a revolution in the banking and financial services industry by industry practitioners.” says Mrs.Luyang Li. She adds, “we thought his concept for an article was not just timely, but fascinating and wouldbe appreciated by our highly educated readers.” Page 2 of 6
    • In his 3,000 plus-words article, Mr. Nechemia argues that among other things, the “Asset Securitizationproduct set new benchmark standards of innovation and productivity, credit enhancement and risk analysis,but in the end, left unchecked and to open market devices, is what he suggests, contributed greatly to theU.S. financial collapse and its tsunami like ripple effect throughout the world.”The article goes on to discuss that many measures are required to repair what has become a badly damagedinternational financial system and proven dysfunctional financial architecture. Moreover, Mr. Nechemiaprovides thoughtful solutions to resolve some of the critical issues necessary to begin mending our creditsystems that will foster healthy and productive financial systems, revitalizing and reenergizing productivitygoing forward. A potential remedy he offers can be replicated by adopting oversight and compliancepractices currently utilized by the United States Food and Drug Administration, among other solutions aswell.According to Editor-in-chief of International Financial Magazine Mrs. Luyang Li, “readers will find thisarticle, as others Mr. Nechemia has authored exclusively for our publication, interesting, fascinating,provocative and even useful to those who call investment banking their profession.”In the article’s concluding paragraph, Mr. Nechemia suggests the following: The introduction of Asset Securitization, and its evolution over three decades, has had a profound impact on consumers and financial institutions as an innovative product and no doubt, it will continue to remain so. In the light of recent events it is clear that more and better regulatory approaches must be instituted in order to ensure that the original model and some of its innovative iterations reconstitute to the original power and value they provided. In this manner, the markets will reset, consumers will benefit and Asset Securitization can regain its rightful perch as one of the most valuable products and financial instruments in banking history.The International Finance Magazine features the country’s senior government officials, prominent businessleaders and high-profile financiers in China, as well as the world. Since first being published in 2000, theMagazine has featured government and finance icons such as Mr. Chen Yuan, the President of NationalDevelopment Bank; Mr. Samuel A. DiPiazza, Jr., CEO of PricewaterhouseCoopers; Mr. Dai Xianglong, Page 3 of 6
    • Chairman of National Council for Social Security Fund; Mr. Haruhiko Kuroda, President of ADB; Mr. LiLihui President of the Bank of China; Mr. Charles Li, Chairman and CEO of JPMorgan; Mr. RobertGreifeld CEO of NASDAQ; Mr. Paul Wolfowitz, President of World Bank; Mr. Francois BourguignonThe World Bank’s Chief Economist; Mr. Wang Lianzhou, The Economist, among scores of other prolificpersonalities within the Chinese as well as global financial community.In an uncommon publishing move, in the same March issue, Mr. Nechemia was also profiled in a secondarticle, “Mr. Ron Nechemia: A Devoted International Civil Servant.” Says Mrs. Luyang, “this full pagepiece offered insight into Mr. Nechemia, he has a unique and profound perspective we felt it was importantto provide our readers and that they would appreciate.”About Mr. Ron NechemiaMr. Ron Nechemia is an international political economist and a political risk analyst specializing incountry/political risks in Asia, with particular expertise in China. Mr. Nechemias unique wealth ofknowledge has earned him many international awards and recognitions. He is frequently invited to consultand to advise in Special High-Level Policy Dialog to express its views and to share experiences onfinancing for development and on trade and investment related issues in front of the internationalcommunity bilateral and multilateral organizations such as the Bretton Woods Institutions -- the WorldBank and the International Monetary Fund (IMF), United Nations General Assembly, United NationsEconomic and Social Council (ECOSOC) and the World Trade Organization (WTO). Mr. Nechemia is amember of the UNCTAD/ICC Investment Advisory Council and recognized as a foreign financial expertby the State Administration of Foreign Experts, the Peoples Republic Of China and he is frequentlyinvited to advise and lecture on behalf of governments such as the United States of America, Republic ofthe Philippines, the Peoples Republic of China, South Korea, and the State of California Department ofEnergy just to name a few. Page 4 of 6
    • About EurOrientEurOrient Financial Group is a private sector global development finance institution accredited financialinstitution by United Nations General Assembly on Financing for Development. The mission of theEurOrient Financial Group is to support the economic and social development efforts of the less developedcountries as they, in particular, seek to achieve the Millennium Development Goals ("MDGs").The EurOrients principal objective is to reducing poverty and promoting sustainable economic growth.EurOrient invests in projects and programs that promote social development, build human capacities, andaddress host government priorities for investments in physical infrastructure that promote and enhancesocial development. These projects include roads, transportation and communication systems, water,sanitation and other types of investments with social development outcomes such as improved quality oflife and increased human knowledge and skills.About International Finance MagazineFounded in 2000, International Financing Magazine is a Beijing–based magazine devoted to national andinternational investment industry in China. The magazines driving mission is to increase knowledge ofeconomic conditions in China, examine country and world-wide impact, and highlight key financialplayers in China and around the world; the publication is recognized as one of the most influentialmagazines in China. It is distributed to the largest government agencies and financial institutions in thecountry and is read by China’s business elite. The magazine has multiple affiliate website relationships thatfurther drive its global readership and influence. Partnership with most periodical databank networks, suchas: www.cnki.net; www.wanfangdata.com.cn; www.cqivp.com; www.sina.com; www.qg.com.cn;www.sinoprojects.com. Among them, all articles are readable on www.cnki.net;www.wanfangdata.com.cn; www.cqivp.com. Page 5 of 6
    • EurOrient at GlanceHeadquarters: Los Angeles, CaliforniaWebsite: www.eurorient.orgCEO: Mr. Ron NechemiaContactsMedia Contact: Jeff Mustard, Spokesperson for the President and the Chair Person of the Board ofDirectors of the EurOrient Financial Group.Tel: 818-206-5322Email: jeff.mustard@eurorient.org ### Page 6 of 6