Securitisation, which involved shifting assets off balance sheets, inadvertently led to the creation of even greater risks that were packaged into toxic instruments that brought down a number of large financial institutions. In Singapore, however, the risks of the U.S. housing market collapse and consequent mortgage and financial institution default were largely moved out of the banking sector and sold to the public. In that sense, corporate/securities laws fulfilled the purpose of disintermediation. But while these insulated Singapore banks, the losses were largely borne by investors, whose confidence in the securities market has been eroded. The article discusses the legal and regulatory changes that have been made in response to the crisis, and suggests further trends and reforms dealing with its aftermath from financial and economic perspectives.
