Amid setbacks for the secondary market at home, where investors have been retreating to safe-haven Treasury securities, Wall Street continues to seek out securitization opportunities overseas.

"Firms continue to look at this business in global terms," said George P. Miller, vice president and deputy general counsel at the Bond Market Association.

Securitization is "increasingly global in character," despite inadequate infrastructure overseas, he said.

He spoke last week during a panel discussion hosted by the association.

Fannie Mae is seeing a "growing interest" in mortgage securitization overseas, said Martin Levine, Fannie's managing director for international housing finance services.

Thailand, Hong Kong, and South Korea are among the countries that have recognized that issuing mortgage-backed securities may lay the groundwork for attracting capital back into sectors from which it has fled, Mr. Levine said. Some of these efforts combine government policies and private enterprise. And the movement has continued despite economic volatility.

The European landscape is "still a situation of separate jurisdictions," said Timothy E. Stapleford, managing director at Bear, Stearns & Co.

The creation of a single currency for much of Europe will provide "a lot of impetus for re-thinking," he said, but it will not guarantee smooth sailing. "Beneath the single currency, you still have nation-states."

Foreign companies are not on a level playing field with U.S. companies for securitization, despite the "ongoing standardization" of the legal and accounting framework across Europe, Mr. Stapleford.

In Germany, Citibank, Ford Motor Co., Capital One Financial, and MBNA Corp. have done several securitizations, because they found both "tremendous liquidity" and sizable demand, he said.

France has a highly evolved legal and regulatory environment for mortgage and asset securitization that gives French companies better opportunities in France than German companies have in Germany, Mr. Stapleford said.

But regulatory difficulties are not stopping the international wave of interest in securitization. "Even banks that are capital-rich are looking to securitize as a means to more effectively manage capital," he said. He said investors and issuers are also pushing for increased securitization activity.

Panelists noted that widening spreads, reduced liquidity, and overseas economic crises have made Wall Street firms more nervous about the risk in asset-backed securities.

"Spreads have widened so much that many investors have stepped back from the market," as evidenced by the scarcity of activity in bonds rated BBB or below, noted Michael M. McGovern, director and senior counsel in the corporate and institutional client group in Merrill Lynch's office of general counsel.

On Wall Street, many firms are rethinking diversification and risk- adjusted rates of return "and just going back to basics," said Mr. Stapleford of Bear Stearns.

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