The committee just set up to look at ways to improve CMBS in the future is very welcome. Chairman Nassar Hussain deserves the thanks of many for agreeing to take on a great deal of extra work and, some might say, a poisoned chalice.
To get results, Hussain will have to try to balance the many sides in existing CMBS deals, whose divisions have been exposed by the stress caused by the financial crash. If the committee comes up with sensible proposals that investors and borrowers feel comfortable with, there is a good chance its ideas will be adopted.
But it should not over-promise to the outside world about CMBS 2.0’s ability to solve the refinancing gap. Investors in capital markets are no more likely to put their money into poor-quality secondary property than banks are. To this end, the input of some property expertise to the committee would be useful.