Michael Bright talks LIBOR and GSE reform

Today’s HousingWire Daily interview features a crossover episode from HousingWire’s Housing News podcast. In this episode, Michael Bright, CEO of Structured Finance Association, discusses findings in the 2020 SFA Annual Report as well as what’s ahead for the market this year in relation to LIBOR, ESG initiatives and GSE reform.

Here is a small preview of the interview with Bright, which has been lightly edited for length and clarity:

Sarah Wheeler: The SFA recently released its annual report for 2020, and it mentioned how the association acted to help restore liquidity and capital flow through the capital markets. I would love for you to walk us through a little bit of what that looked like, because there were some weeks there in the spring that were also pretty scary.

Michael Bright: It was scary because we all didn’t know in March of last year what was coming at us, and the idea that we had to close down the economy was just so baffling. You were kind of like, “That can’t be right, there’s no chance.” I was also reading studies that were saying we would go into lockdown for three months and then come back out and go back in, and I was like, “what does that mean? It does doesn’t make any sense.” So, it was scary in that regard. Personally, it never set off inside of me, the same sort of, you know, chemicals of fear that 2008 did. And it could be because I was a little bit older and I had a little bit more experience, whereas, when ‘08 happened, I was 29 years old and sitting on a trading desk trying to figure things out. But you know, the financial system is now just in a stronger position. It was super capitalized this time around; that wasn’t a leverage bubble. Leverage bubbles are particularly scary, and I think we got the impression early on that there’s a lot we’re going to have to wade through, but there was a real commitment on the part of policymakers to deal with it and to deal with it aggressively.

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