EuroCatalyst 2007 | Live from Madrid

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welcome EuroCatalyst 2007 Madrid marks the final instalment of the five-year EuroCatalyst series on the globalisation of mortgage markets and pan-European mortgage market developments. This historic dialogue was launched in Madrid on September 23, 2002, with the following stated goals and vision: 1. To raise the calibre of dialogue and debate on global mortgage market developments with European market integration as the centre of that debate; 2. To reposition the role and importance of European mortgage markets by discussing their importance in the context of globalisation; 3. To explore the implications and consequences of the gap between housing as a local activity and funding and risk transfer as a global activity; 4. To compare disparate European mortgage markets and establish collaborative benchmarks for best practices and market efficiencies across the entire mortgage value chain; 5. To emphasize the importance and balance of the entire mortgage value chain to prevent market distortion or crises by the overemphasis on a particular market segment; 6. To establish the community upon which the European mortgage industry could develop by bringing together all players from all sectors in all markets in one place at one time in an educational, interactive and highly entertaining forum.

Although the emotionality of market behaviour is dictated by a herd mentality, our goal has always been to bring together a small group of the most open-minded and enlightened industry professionals to call things as they see them happen, most often before they happen. True to its name, the event has served as the catalyst to accelerate European mortgage market developments focusing on the commercial realities of the markets and leaving their political implications to the political process. Over the past five years the result has inspired tremendous change in European markets by challenging US dominance and offering alternative strengths, strategies and solutions that today place Europe at the centre of what is now a global industry.

As newspaper headlines across the world cover pieces of the story we began telling in 2002, EuroCatalyst 2007 is focused on how European mortgage market players will navigate the new world of housing finance in global capital markets, how players can find valid exits, as well as how the entire European industry will move beyond the malaise triggered by the US sub-prime meltdown. It is often said that where there is chaos, there is profit – clearly winners will emerge from the chaos and we’ll be pointing out which players and market sectors stand to gain the most.

eurocatalyst thanks its partners

EUROCATALYST 2007: LIVE FROM MADRID

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EUROCATALYST 2007: Burning Down the House* / Quemando la casa notes MEDIA RESTRICTION ON EUROCATALYST 2007 MADRID Media is restricted from attendance at EuroCatalyst 2007 due to the sensitive nature of the topics being discussed.

PROGRAMME CONTENT AND AUTHORSHIP EuroCatalyst is a strategic advisory firm based in the Netherlands which, for the past seven years, has specialised in accelerating cross-border and new market entry to firms operating across the European mortgage value chain. Since 2002 the annual EuroCatalyst event has provided a high-level insider’s view of European mortgage markets and their developments in the context of globalisation so that those working in the markets are better able to understand and navigate the obstacles and opportunities. The EuroCatalyst event is not sponsored or endorsed by nor does it represent the view of any single trade organization and does not hold any political affiliation. We are focused on the commercial realities of the markets. All content for the event is derived from EuroCatalyst’s research and work across global mortgage markets. Event hosts, speakers, panellists and participants do not necessarily share our views. * “BURNING DOWN THE HOUSE”: For the past five years EuroCatalyst has themed sessions with musical interludes. Every year we open the event with the popular song “Burning Down the House” by the Talking Heads. (It is a conference after all). As this is the last EuroCatalyst event in its current format, the title “Burning Down the House,” refers to the conclusion of the 5-year series – and not as direct commentary on current market conditions.

agenda summary

EUROCATALYST 2007 MADRID: Live and uncensored / En vivo y sin censura

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15 MIN 2 HR 45

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PASS THE PARCEL: Speculating on house price performance BREAKTHROUGH OR BREAKOUT? The spread of sub-prime and non-conforming lending across Europe, the rise in special servicing and related developments across the value chain MORNING COFFEE BREAK 3. The globalisation of mortgage markets, risk dispersion, housing prices and the sub-prime crisis a. A new paradigm for surviving the financial dislocation of the new non-bank world b. The dry forest: Will regulators spark the flame or end the drought? c. Chicken “Little” meets the Egg: Which came first, the liquidity crisis or the credit crunch? Scrambling for exits LUNCH: STANDING BUFFET 4. SPAIN: Testing the strength and resilience of the Spanish mortgage market 5. Après le deluge AFTERNOON COFFEE BREAK 6. TICKET TO RIDE: The rise of third-party distribution, disintermediation and distortion.

Which markets have found the balance?

7. SHOOT FIRST, AIM LATER: Emerging Markets, infrastructure and the “New Frontiers” for cross-border growth in European mortgage markets

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Pass the parcel: Speculating on house price performance Pasa la bola: Reflexionando sobre el comportamiento de los precios de la vivienda HOSTS TODD GROOME, Advisor, Monetary and Capital Markets Department, IMF TONI MOSS, CEO, EUROCATALYST PANELLISTS SIMON HAYES, Senior UK Economist, BARCLAYS CAPITAL MICHAEL LEA, Principal, CARDIFF CONSULTING and Professor, SAN DIEGO STATE UNIVERSITY Just as DNA contains the genetic information that allows all living things to function, grow and reproduce, housing prices are the DNA of the global housing finance ecosystem. Any discussion on housing prices is without a doubt the most highly charged topic of discussion among governments, economists, lenders and the public in general because so much is at stake. Whether you are bullish or bearish on house-price performance, there will never be consensus over whether prices will go up or down because the industry does not have the historic data and tools to measure them accurately enough. EuroCatalyst 2005 Rome featured four of the top house price economists to discuss a session entitled, “Holding Our Breath: High Anxiety Over Housing Prices”. At that time, the value of residential property had increased the equivalent to 100% of the combined GDP in developed countries.

Back then The Economist argued that it was the most massive capital markets bubble in history - and still housing prices continued to increase. What we learned from that session was a disturbing pattern in the synchronicity of housing prices across the world. In short, a fall in one market tends to precipitate a fall in others.

It is far too early to credibly discuss “lessons learned” from the US subprime debacle because its impact continues to worsen. What is clear is the trigger – which was the halt in house price appreciation – and the extent to which mortgage product design was entirely dependent upon housing prices continuing to rise. As Warren Buffet once observed, “You don’t who’s swimming naked until the tide goes out.”

Today we see housing prices in many European countries in varied stages of “cooling off” since 2006, with a few exceptions in the geographically smallest countries.

This session provides an up-to-date assessment of European housing prices and the related implications on portfolio performance and mortgage product development.

We feature Julian Callow, who returns to address the fragile balance between housing prices and interest rates, and Michael Lea on the impact of house price considerations on underwriting and product development. The session is co-hosted

by Todd Groome, who will comment on the challenges of regulatory intervention to control the irrational exuberance that sometimes drives speculative investments and speculative lending.

0900-0930 (30 min)

RECOMMENDED READING: Understanding Recent Trends in House Prices and Home Ownership, 2007 Jackson Hole Symposium, Kansas City Fed, “Housing, Housing Finance, and Monetary Policy”, Robert J. Shiller Irrational Exuberance, Robert J. Shiller RICS European Housing Review 2007 Bubble Trouble, Robert J. Shiller, Project Syndicate, September 2007

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Breakthrough or breakout? The growth of subprime and nonconforming lending across Europe and its impact across the value chain / ¿Avance o ruptura? El crecimiento de los préstamos de alto riesgo en Europa y su impacto en la cadena de valor HOSTS TONI MOSS, CEO, EUROCATALYST TIM SKEET, Managing Director, MERRILL LYNCH PANELLISTS MIKE CULHANE, Chairman and CEO, OAKWOOD GLOBAL DR. MICHAEL LEA, Principal, CARDIFF CONSULTING, and Professor, SAN DIEGO STATE UNIV. EDDIE REGISTER, Senior Director, European Structured Finance, FITCHRATINGS RON ROARK, CEO, CROWN NORTHCORP DAVID RYAN, Chairman and CEO, STATEFIRST GROUP DENNIS SHEEHAN, Senior Managing Director, Continental Europe, GMAC-RFC When the EuroCatalyst 2002 agenda was released five years ago, we received concerned calls from structured finance bankers in London who asked, “What’s a covered bond?” Since January of this year we’ve had calls ranging from concern to panic from investors and others asking for clear definitions of prime, sub-prime and non-conforming lending in the European context. The truth is, there are no distinct definitions because they vary in underwriting guidelines from lender to lender and in practice from country to country. Definitions of prime lending in Europe are simple – prime loans are those which fit the criteria of covered bond legislation in each national market.

Sub-prime and non-conforming are differentiated by proprietary loan marketing risk pricing. Clearly much more nonconforming lending occurs than any national market statistics will ever show, or nonspecialised lenders will ever specify. Why? Because commercial realities dictate that organic growth in market share means moving up the LTV curve, down the credit curve or extending the duration of the loan to attract more customers. This session also looks at the related sectors impacted by product expansion including risk-based pricing, the value of mortgage and title insurance, packaging, property valuation and most importantly, the need for special servicing and the current lack of it. Featured in the session are four of the most important entrepreneurs in European markets who provide crucial insight on how they continue to forge ahead balancing the chaos of current market conditions while keeping a strong hand on operational performance. Rounding out the session is Michael Lea, who is currently authoring a new study on sub-prime and non-conforming lending in Europe and Eddie Register, who will address the symbiotic relationship between specialised lending and special servicing.

RECOMMENDED READING EuroCatalyst 2005, Session 7: The Wine Wars (US vs. Europe): Europe Rides Shotgun down the credit curve while the US pulls in the reins, EuroCatalyst BV, Toni Moss EuropeServicing 2006 Conference Programme, Day 2, “Tomorrow Never Dies”, EuroCatalyst BV, Toni Moss

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The globalisation of mortgage markets, risk dispersion, housing prices and the sub-prime crisis / La globalizaci贸n de los mercados hipotecarios, la dispersi贸n del riesgo, los precios de la vivienda y la crisis de los cr茅ditos de alto riesgo The mortgage and housing finance industry will always be a tug of war between the governmental imperative and social commitment to expand homeownership and the financial industry seeking to extract the most profit from it.

This three-part session discusses how mortgage markets have globalised which has in large part led to the current situation. Which European markets show similar underlying features and vulnerabilities, which market fundamentals are victims of the process and what mortgage markets will look like moving forward? In what appears to be a drowning world, our purpose is not to describe the water.

This session looks for profitable exits among diminished returns, survival strategies in the new order and the surprising opportunities that always present themselves in times of chaos. In this case, as we seek to reopen the dialogue between important market players to look for internal solutions to industry-wide problems, we also point out some remaining opportunities across the value chain and across European markets.

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The shadow banking system and financial dislocation of the new nonbank world / El sistema bancario en la sombra y la desarticulación del nuevo mundo de los no-bancos SESSION CO-HOSTS TONI MOSS, CEO, EUROCATALYST TIM SKEET, Managing Director, Head of Covered Bonds, MERRILL LYNCH PANELLISTS TODD GROOME, Advisor, Monetary and Capital Markets Department, IMF JACK GUTTENTAG, Professor of Finance Emeritus, WHARTON SCHOOL OF THE UNIVERSITY OF PENNSYLVANIA PAUL DUDOUIT, Managing Director, Head of Funding, CRÉDIT FONCIER GROUP PETER JEFFREY, Head of European Securitisation Group, PRICEWATERHOUSECOOPERS ACHIM DÜBEL, Financial Sector Economist, FINPOLCONSULT (GLOBAL)

The opening segment of this three-part session addresses the shift from the traditional banking world in which most regulatory policies were developed to a new world dominated by a rapidly evolving "shadow" banking system which operates beyond the reach of regulators. This “non-bank” world is comprised of alphahungry investors driving highly complex and levered investment conduits, vehicles and structures that have risen in conjunction with the global housing boom. The return/yield formula has led to an appetite for risk that the traditional financial system cannot digest. As we have seen recently, the result is a gradual loss of control over monetary policy by central banks and panic-driven chaos that started a run on funds by investors and more recently a parallel run on two banks by consumers.

The speed at which the contagion has spread equally shocked market participants and the official sector, proving once again that the new world of financial innovation is no more than grand experiments of trial and error that lead to uncertain and severe consequences on a global scale. This session attempts to bring these extraordinarily sensitive and difficult issues to the forefront to discuss possibilities for redress or adaptation. If evolution provides no other options than to evolve or die, the choice is clear. The question is, what are we evolving toward?

RECOMMENDED READING: “Global Financial Stability Report” September 2007, IMF “Mark-to-Market Accounting and Liquidity Pricing,” Franklin Allen and Elena Carletti, July 20, 2006, Wharton School Financial Institutions Center “Where’s Waldo? Where’s W?”, PIMCO Investment Outlook, Bill Gross, September 2007 The New Bogeyman of Financial Capitalism, Nouriel Roubini, Project Syndicate, August 2007

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THE DRY FOREST: Will regulators spark the flame or end the drought? / EL BOSQUE SECO: ¿Acabarán los reguladores con la sequía o atizaran el fuego?

SESSION HOSTS TONI MOSS, CEO, EUROCATALYST TIM SKEET, Managing Director, Head of Covered Bonds, MERRILL LYNCH PANELLISTS MICHAEL COOGAN, Director General, COUNCIL OF MORTGAGE LENDERS ACHIM DÜBEL, Financial Sector Economist, FINPOLCONSULT (GLOBAL)

TODD GROOME, Advisor, Monetary and Capital Markets Department, IMF SAM THEODORE, Managing Director, European Financial Institutions, DBRS RICK WATSON, Managing Director, EUROPEAN SECURITISATION FORUM As capital market innovation is a series of human trial and error, so is regulation.

Each day that passes reveals a new hand in the high-stakes poker game being played out among central banks and financiers on a €122 trillion global playing field. Although the financial innovation of securitisation has Despite the benefits of securitisation, misperceptions of the Enron scandal launched a vigorous debate that has been renewed by the sub-prime crisis. Those who question the virtue of securitisation argue that its benefits are gained from shifting uncompensated risk onto third-parties. The argument implies that these third-parties (primarily investors) are ignorant of the full extent of those risks. It is true that all mortgage market participants from consumers to investors need greater transparency than banks, funds and almost all mortgage market players are currently providing. and perhaps more than market “natural selection” should be levied against those who do not comply with market standards. However, should public sector regulators be in the business of preventing losses? Part 3 captures the drama of what lies in the fragile balance of markets today. No doubt all regulators are on top of the issues and many feel compelled to act. The tension is rising with attention-grabbing headlines and an increasingly panicked public. As behavioural finance has shown, market dynamics are heavily driven by the erratic nature of individual human behaviour.

What lies in the balance is consumer confidence and the threat of a global recession.

RECOMMENDED READING: America’s Day of Reckoning, Joesph E. Stiglitz, Project Syndicate, August 2007 The Asian Crisis Ten Years After, Joseph E. Stiglitz, Project Syndicate, July 2007

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Chicken “Little” meets the Egg: Which came first, the liquidity crisis or the credit crunch? Scrambling for exits / El huevo o la gallina ¿que va antes? ¿La crisis de liquidez o la restricción del crédito? Buscando una salida.

SESSION HOSTS TODD GROOME, Advisor, Monetary and Capital Markets, IMF TONI MOSS, CEO, EUROCATALYST PANELLISTS CRAIG BERESFORD, Director of Asset Sales - Capital Markets, GMAC-RFC ALAIN CARRON, Head of Securitisation, CRÉDIT FONCIER LIAM COLEMAN, Head of Treasury and Funding, NATIONWIDE STUART JENNINGS, Managing Director, European Structured Finance, FITCHRATINGS TED LORD, Managing Director, BARCLAYS CAPITAL With panic driving pricing and a severe lack of overall confidence in the market, there is currently no standard for market pricing. Worse, in some cases even strong collateral cannot be sold or financed at any price that nears its true value. This session is focused on liquidity and exits.

LIQUIDITY – How can targeted liquidity be injected into the markets?

– What resources can originators turn to for funding?

– Who is currently supplying warehouse lines?

COVERED BONDS: Where do covered bonds stand on the sub-prime crisis? While these instruments appeared to have escaped the subprime contagion, in recent days, they, too, have been touched by overall market concerns. Their spreads are changing dramatically from day to day How well are diversified funding platforms working in the current climate?

WAREHOUSE FUNDING: – How has the current environment impacted the availability/accessibility of warehouse funding?

– Have the criteria been tightened on the warehouse level, making new originations more challenging?

– Are the warehouse lines providing a form of regulation for lenders? If so, is it rightfully the role of a warehouse lender to regulate originations?

SECURITISATION AND WHOLE LOAN SALES AND TRADES (When securitisation is no longer the preferred exit) – how has the whole loan sales & trade market grown as a result?

– For an issuer, what factors help determine whether securitisation or whole loan trades are a more viable exit?

– How does the growth of whole loan sales & trades impact the lender-borrower relationship?

– What view do investors take on multi-originator pools from the perspective of diversifying risk?

SERVICING: – How are the new servicers impacted by the decelerated pace of loan sales for securitisation?

– How are servicers managing portfolios which can no longer be sold at any price?

– How well prepared are servicers to defend against large rises in arrears and prevent portfolio losses?

– How are new servicers entering the market coping with the distress of new originators?

– Special servicing: Are European servicers prepared for an increase in arrears?

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Testing the strength and resilience of the Spanish mortgage market / Poniendo a prueba la capacidad y resistencia del mercado hipotecario español SESSION HOST JUAN PABLO SORIANO, Managing Director, EMEA Covered Bonds – Europe, MOODY’S INVESTORS SERVICE PANELLISTS ANTONIO BONÉ, Risk and Compliance, AIG UNITED GUARANTY FERNANDO CUESTA, Head of Funding, CAJA MADRID JUAN GARCIA, Director, FITCHRATINGS GLORIA HERNANDEZ, Chief Financial Officer, BANCO PASTOR LUIS LEIRADO, Director General, TINSA TASACIONES INMOBILIARIAS S.A. ANGEL MAS, President, European MI operations, GENWORTH FINANCIAL LORENA MULLOR, Chief Economist, ASOCIACIÓN HIPOTECARIA ESPAÑOLA EuroCatalyst 2002 was held in Madrid to point out the need for convergence of structured finance and covered bonds as complementary funding tools that comprise a funding spectrum. The best way to illustrate that point (which was quite unpopular back then) was to hold the discussion in Spain, which was the most progressive funding market in Europe that year. Since then the Spanish market has grown from strength to strength with some of the most progressive funding innovations in any country. According to the Asociación Hipotecaria Española, the annual volume of new Spanish mortgage credit in 2006 grew 13.2% in comparison to 2005. In 2006 RMBS issuance across 32 transactions was €38.8 billion, an increase of over 42% in 2005. However, with residential mortgages and cédulas hipotecarias accounting for slightly more than 70% of Spanish structured finance collateral, concern has increased regarding risk in the market. Specifically, the inclusion of low equity and self-employed borrowers, the increase in higher LTV and debt-to-income ratios of securitised pools and the proportion of second home exposure has led many to view the remainder of 2007 and 2008 as a period of testing for the resilience of the Spanish RMBS market. Furthermore, the Spanish property market presents an oversupply of housing stock which has negatively impacted property developments already in the pipeline. In addition, late-2007 or early-2008 will see the publication of a new mortgage law and implementation of Basel II guidelines which increase the stakes of how the market will play out. With high reliance on the RMBS market to fund the growth of higher risk mortgage books and a growing preference for the flexibility of RMBS over covered bonds, current global market conditions pose an interesting challenge for Spanish issuers in the near term. How are they rising to the challenge?

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Après le déluge (After the deluge) / Apres le déluge (Después del diluvio) Pat Butler, Head of Global Financial Services Practice, McKinsey & Company Whether you are currently in a state of mild fear, full-blown panic, anger, blame, denial, blissful ignorance or stoic acceptance, life and lending continue. In this session Pat Butler addresses the current crisis and prognosis (you will find Prozac underneath your chair at the event) and more importantly brings our focus to the activities that lenders will need to get right once the crisis has passed. For those of you who are serious about proactive recovery efforts, Pat will discuss new product opportunities, distribution management and the emergence of crossborder platforms and infrastructure taking precedence over financial engineering (it’s about time). The recovery will be a return to a genuine customer orientation – and not a banker’s mentality.

Considering the wide range of blame attributed to all sectors of the lending and capital markets industry we’re confident that everyone will gain value from the discussion.

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Shifting power, impacting profit: The rise of third-party distribution in Continental Europe / Cambio en el poder, impacto en los beneficios: la aparición de un tercer actor en el negocio hipotecario en la Europa continental SESSION CO-HOSTS TONI MOSS, CEO, EUROCATALYST MICHAEL BOLTON, CEO, EDEUS PANELLISTS MARTIN DAMASKE, Managing Director / Member of the Board, HYPOPORT AG (GERMANY, NL) JACK GUTTENTAG, Professor of Finance Emeritus, WHARTON SCHOOL (USA) DAVID LYKKEN, Managing Partner, MORTGAGE BANKING SOLUTIONS (USA) JOHN MALONE, Chief Executive Officer, PREMIER MORTGAGE SERVICES (UK) MARCO PESCARMONA, Chairman and CEO, GRUPPO MUTUIONLINE (ITALY) “Brokers? You can’t live without them and you can’t kill them,” is the most frequent comment expressed by lenders across the globe. Learn to live with them. According to a recent MOW/EFMA/Fortis report (Changing Channel Choices) today over 40% of mortgage lending in Europe (more than €500 billion a year) is intermediated through third-party distribution, with no direct regulation over intermediary activities in the majority of countries in their study. In the UK and Netherlands, which are the most developed intermediary markets in Europe, over 60% of mortgages are now distributed through indirect channels. By far the most necessary development in Continental European markets has been the need for alternative distribution channels and third-party brokers. With the race across borders well under way, market incumbents and new market entrants find themselves engaged in buyout and bidding wars over access to distribution in most markets. This session features a formidable panel of the most rapidly growing and successful broker models across Europe. For any lender who doubts the power of intermediaries, consider John Malone whose Premiere Mortgage Services originates more than £40 billion annually in the UK. Consider HypoPort, whose proprietary EUROPACE platform is the largest transaction platform for credit products in Europe. Or Marco Pescarmona, the entrepreneur behind MutuiOnline, Italy’s most successful online broker and perhaps one of the only truly independent brokers in the Italian market. We also introduce American David Lykken, who specialises in helping the most successful brokers transition to becoming bankers. Not to mention Jack Guttentag, who has introduced and promoted the concept of UpFront Mortgage Brokers (UMBs) to provide pricing transparency for consumers and restore integrity to the US broker market. We also feature Achim Düebel, Europe’s leading independent economist and author of the economics section of the above-mentioned distribution study. Finally, we introduce the UK’s Michael Bolton as session host, who will inevitably struggle to ask questions as opposed to his traditional role of answering them.

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Shoot first, aim later? Emerging Markets as the “New Frontiers” for cross-border and organic growth / ¿Primero dispara y luego apunta? Los mercado emergentes como “Nuevas Fronteras” para el crecimiento orgánico y transfronterizo SESSION HOST TONI MOSS, CEO EUROCATALYST UDO VAN DER LINDEN, Head of Structured Consumer Capital, ABN AMRO PANELLISTS IGOR KOUZIN, Chairman, DELTA CREDIT BANK (RUSSIA) CARMEN RETEGAN, CEO, GE MONEY BANK (formerly DOMENIA, ROMANIA)

BAHADIR TEKER, CEO, Mortgage Express (TURKEY) ÖMER SELEBI, Personal Loans Manager, TÜRKIYE İŞ BANKASI AŞ (TURKEY) Although we are as interested and intrigued as everyone by the potential in CEE and Russian markets, we title this session “Shoot first, aim later” as a response to the numerous headlines calling CEE mortgage markets “safe havens” at a time when the most transparent markets are suffering investor backlash for the lack of clarity on transactions. Profit and potential are a given in these emerging economies and our session features some of the best entrepreneurs in those markets – however, we question the early stages of required infrastructure for market stability in the long term.

This session is a candid overview of how CEE markets are really performing, focusing on the commercial realities that fully encompass geopolitical implications which cannot be ignored. If mortgage markets vary in form but not function – as we have always argued – CEE countries will be one of the greatest tests of that theory.

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eurocatalyst 2007 live from madrid: dialogue participants in more detail CRAIG BERESFORD who is the Director of Asset Sales for GMAC-RFC has worked in the U.K. residential mortgage market since 1995. He started with the Britannia Building Society, having previously worked in project finance for the civil service. He spent 2 ears on the Britannia Fast Stream Programme before moving into structured finance and working on whole loan trading and securitisation. In 2002 he joined GMAC-FRC in the U.K. at GMAC-RFC. Craig has developed the mortgage asset trading operations into the largest in the U.K., innovating the market by introducing forward sale and purchase programmes and a hybrid whole loan and securitisation platform.

MICHAEL BOLTON has over 17 years of experience in the industry, and an enviable career. Michael is a well recognised and highly respected figure within the specialist mortgage sector. After holding a variety of key roles Michael joined BM Solutions in 2001 and was tasked with re-launching the mortgage lending division of the Halifax subsidiary. From a standing start and with distribution solely through the intermediary market, BM Solutions' proved to be an outstanding success and origination grew to 25% market share. Reflecting this achievement 2004 saw Michael’s promotion to Managing Director of BM Solutions and Halifax Intermediaries. Michael’s progression grew apace and in 2005 he was promoted to overall Head of Specialist Lending for HBOS. As Chief Executive Officer of edeus Michael has brought together an enviable and experienced team that have taken the market by storm and created the ultimate service driven intermediary focused lender.

ANTONIO BONÉ oversees risk management and structured credit for AIG United Guaranty in Spain and Portugal. He is involved in the origination and underwriting of HLTV residential mortgage portfolios and also participates in other EMEA markets where AIG UG is present, such as the UK, Poland and Hungary. He is also responsible for macroeconomic and quantitative analysis and has contributed to the development of AIG UG’s methodologies for stress testing housing loan portfolios and economic capital models. Prior to joining AIG Antonio worked as a credit risk consultant towards Basel II implementation and in the areas of fixed income and derivatives. He is an economist and holds a MSc. degree in Economics and Finance from the University of Warwick.

FANNY BORGSTRÖM is senior vice president and head of group funding at Nordea, a position she has held since 1997. Prior to this, she was first vice president, international treasury, of Merita Bank of Finland, which merged with the Swedish Nordbanken in 1997 to become MeritaNordbanken. Merita Bank and Nordbanken, along with Unibank of Denmark and Christiania Bank og Kreditkasse of Norway have conducted operations under the Nordea name since December 2001. Nordea today is the largest financial services group in the Nordic and Baltic Sea region. Fanny, who has two children, is a graduate of the University of Uppsala, and worked as managing of international funding and assistant general manager,

EUROCATALYST 2007: LIVE FROM MADRID

international treasury, of Union Bank of Finland, the forerunner to Merita Bank.

JULIAN CALLOW is the Chief European Economist at Barclays Capital, the investment banking division of Barclays PLC. The European economics team comprises of nine economists located in London, Frankfurt and Paris, and produces detailed daily, weekly and thematic publications on the European economy, as well as global economic analysis. Julian joined Barclays Capital in 2003 from Credit Suisse First Boston (1999-2003) where he was Chief Economist for Continental Europe and co-head of European Economics. While at CSFB he was consistently rated in the top five for European economics in the Institutional Investor survey, and was ranked 1st in the Extel survey of investors in 2002 for European economics. His CSFB team was also rated number one or number two in the monthly FT Deutschland poll of ECB forecasting accuracy. His work on US-European productivity comparisons has been cited in various publications; he has also published detailed research on the EU housing market and on the European corporate sector. Julian has also worked as an economist at Dresdner Kleinwort Wasserstein (1992-1999) and Chase Manhattan (1990-1992). He began working as an economist at the Bank of England (1987-1990) after graduating from Oxford University in 1987 with a degree in Philosophy, Politics and Economics.

ALAIN CARRON is the Head of Securitisation at Crédit Foncier. Before arriving at Crédit Foncier, Alain was responsible for securitisation markets for Continental Europe for Standards and Poor's, a position he held for 12 years.

Alain holds an engineering degree from École Nationale Supérieure de Techniques Avancées and an MBA from Institut d'Études Politiques de Paris, two of France's elite Grandes Écoles MIKE CULHANE is the founder, CEO and Chairman of Oakwood. Bringing more than 10 years of financial services experience to the role, Mike founded Oakwood in 2003 to capitalise on opportunities in specialist finance markets around the world. To date Oakwood has made five significant investments in specialist lending businesses in Australia, Italy, and the UK. Most recently, Mike oversaw the much publicised launch of edeus into the UK mortgage market. Prior to the creation of Oakwood, Mike worked for Friedman Billings Ramsey International Ltd., a NYSE-listed investment bank specialising in the financial services industry, from 1992 to 2003. In 1996 Mike returned to the UK from Washington DC to found Future Mortgages and, in 1997, the London office of FBR. He retains a seat on the London board of FBR International Ltd. Following the sale of Future Mortgages to Citigroup in 2001, Mike went on to create Pepper Homeloans, now the third-largest specialist mortgage lender in Australia. Mike graduated from the LSE with honours in Economics with International Relations. He is married with two children and lives in Kensington, London.

PAT BUTLER is a Director in McKinsey & Company’s London Office and is a leader of their worldwide Financial Services

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14 Practice. He has served banks, insurance companies, asset managers and other players in the UK, Australia, South Africa, the U.S. and Continental Europe. He has also led McKinsey’s European Retail Banking Practice and the London Financial Services Practice. Pat’s work with McKinsey has covered almost all aspects of financial services: from broad universal banks to specialist mono-lines; from short, sharp strategy engagements to multi-year transformational change programmes. Prior to McKinsey Pat worked as a chartered accountant with Arthur Andersen & Company. He has graduate and post graduate degrees in business and economics from University College Dublin, and qualified as a chartered accountant in 1984. Pat is Irish, lives in London, but inevitably spends most of his time on airplanes. He is married with three children and tries to spend much of his spare time in the French Alps.

LIAM COLEMAN is Head of Treasury and distribution for Nationwide. He has direct responsibility for an asset base of £7 billion, split between financial institution bonds, corporate bonds, asset-backed securities and equity investments. He is also a member of the Treasury Division Senior Management Team and the Treasury & Commercial Division Senior Management Group. Liam initiated and lead the transaction team for the first CDO for a building society, a €1.4 billion transaction. Prior to becoming head of investment and distribution, Liam led a senior treasury division project team in the production of a strategic development plan for the division covering a 5-7 year time horizon, and before that, his primary responsibility was for management of Nationwide's capital market funding requirements i.e. bond market and bank funding, and its capital requirements including issuance of subordinated and structured subordinated debt and other regulatory capital instruments. Liam, who received a BA Honours in Geography from the University of Manchester, has also worked for the Mitsubishi Bank as manager of corporate finance and as loan manager at Hambros Bank Ltd. He is married with three children.

MICHAEL COOGAN is the Director General of the Council of Mortgage Lenders, UK. Michael qualified as a barrister in 1981 and, following a short period in private practice, joined the Consumers' Association in 1983. Between 1984 and 1987 he worked at the Greater London Council and for its successor, the London Residuary Body. He joined the Building Societies Association in 1987, becoming head of legal services of the BSA and Council of Mortgage Lenders in October 1993. He became director general of the CML on 1 December 1996 to lead up the independent CML on its separation from the BSA on 1 January 1997. The CML represents the whole mortgage industry and its members include banks, converted banks, building societies, insurance companies and other specialist residential mortgage lenders.

As director general Michael has overall responsibility for the management of the CML and is its main representative to government, parliament, regulators, outside trade and professional organisations. He is a regular spokesman for the mortgage lending industry at seminars, conferences and in the media. He is married to Lyn, with a young daughter, Caitlin.

JIM CUNNINGHAM Jim joined the CML as senior economist in 2005 and is responsible for developing the CML’s view of the mortgage market. Prior to joining the CML, Jim spent two and a half years at Portman Building Society where he

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started up the Basel 2 programme. Between 1983 and 2003 Jim worked in economics and credit risk roles at Barclays. He was Head of UK Economic Research from 1993 to 2001 and Head of Developed Economies Analysis in Group Credit Risk from 2001 to 2002. In the early 1980s, Jim worked for an economics consultancy.

MARTIN DAMASKE studied at the University of Göttingen and the University of Maryland at College Park, and holds a diploma in business administration as well as a diploma in physics. He has written numerous publications regarding mortgage origination, risk-based pricing, funding and securitisation in the real estate industry. From 1998 Martin worked as a business analyst and project with a strong focus on mortgage-market-related topics. In 2001 he joined the Freie Hypo AG in Berlin (later renamed to Hypoport AG) as a project director. Currently Martin is a member of the group executive board of the Hypoport AG and member of the board of directors of Hypoport Capital Market AG and Dr. Klein & Co. Capital AG. His business unit has mainly been involved in pooling multi-family housing assets to issue a CMBS transaction after a ramp-up phase. Over the last several years, his responsibility has focused on building the technical funding, analysing and reporting platform that is the leading reporting software for more than 80 European securitisation deals and an information and analysis portal for 90% of all European public ABS transactions across all asset classes.

ACHIM DÜBEL is an independent international consultant based in Berlin. In this function, he provides economic analysis and advice on the legal, regulatory, fiscal, and social aspects of European financial sector development, with a special focus on mortgage finance. His clients include international organizations, governments, trade associations, and the private sector. Achim was on the staff of the Financial Sector Development Department of the World Bank in Washington, D.C., as a senior financial economist from 1998 to 2000. In this position, he advised emerging economies on mortgage and capital market policy issues.

From 1991 to 1998, he worked for Empirica, an economic think tank based in Bonn and Berlin, and as a senior economist focusing on mortgage finance, housing and urban development policy, regional economic development, and large commercial real estate investment projects. He has been a permanent adviser for the Association of German Mortgage Banks (Pfandbrief issuers) since 1993. In 1995, he undertook the first econometric model based commercial credit risk analysis outside the United States that contributed to the change in regulatory approach in banking towards risk-based capital requirements. In 1997, he published the first internationally comparative analysis of mortgage prepayment risk. In 2003, he co-authored the Mercer, Oliver, and Wyman study on Financial Integration in the EU for the European Mortgage Federation.

PAUL DUDOUIT is Managing Director, Head of Funding for Crédit Foncier Group – the leading specialised real estate finance institution in France, and part of the Caisse d’Epargne Group – France’s third largest banking group. His role as Head of Funding includes responsibility for bond issuance of the Compagnie de Financement Foncier – the group’s AAA-rated société de credit foncier, with an annual funding programme over €20 billion. Paul joined the Crédit Foncier Group in 1992 following several years of experience in the industry. Prior to participating in the

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15 creation of the Compagnie de Financement Foncier in 1999 and assuming his role of Managing Director of Long Term Funding, Mr. Dudouit developed Crédit Foncier’s loan portfolio and served as an advisor to the Board of Directors.

Paul holds an engineering degree as well as a Master’s degree in marketing and management.

ALVARO GIL is an associate director in Fitch Rating’s European structured finance group based in the Madrid office. His primary area of expertise is residential mortgage backed securities and serves mainly the Spanish market.

Alvaro previously worked in real estate structured finance as a director at Hypo Real Estate Bank International and as an associate director at the Royal Bank of Scotland. He also worked in real estate finance as a senior credit commercial officer at Fortis Bank. Alvaro earned his BA(Hons) in Business Administration from I.C.A.D.E. and Middlesex University Business School, and a MSc in Finance from the University of Reading. He also holds a P.D.D. from I.E.S.E. Business School.

TODD GROOME: Todd is an Advisor in the Monetary and Capital Markets Department of the IMF. He is responsible for multilateral surveillance activities and review of capital markets issues in the mature markets, focusing on structural issues, which may influence medium-term financial stability considerations. Todd has over 18 years of investment banking and legal experience related to financial institutions in the U.S., Europe, and the Asia-Pacific region. Todd has significant experience in debt and equity capital markets, balance sheet and capital management issues, and merger planning and execution for banks and insurance companies.

Prior to returning to Washington D.C. in 2002, Todd served as Managing Director and Head of the Financial Institutions Groups of Deutsche Bank and Credit Suisse First Boston in London, focusing primarily on debt capital markets and capital and balance sheet management. While at Deutsche Bank, he also managed the European High Yield origination business. Prior to that, he worked with Merrill Lynch & Co. in London and New York as part of the Financial Institutions Corporate Finance Group working in M&A, advisory, and debt and equity financing for banks and insurance companies. Before moving to London in 1989, Todd worked as an attorney with Hogan & Hartson in Washington, D.C., as part of the Financial Institutions Group focusing primarily on regulatory issues, and merger and capital raising activities for U.S. banks and savings institutions. Prior to joining the IMF, he was a consultant to Hovde Capital Advisors, a hedge fund and merchant banking operation in Washington, focusing on financial institutions. Todd received his law degree from University of Virginia School of Law, and graduated summa cum laude with a B.A. in economics from Randolph-Macon College. Todd also received an M.B.A. from the London Business School.

DR. JACK GUTTENTAG is a Professor Emeritus of Finance at the Wharton School of the University of Pennsylvania. He served as an Economist with the Federal Reserve Bank of New York (1954-1960); as the Chief, Domestic Research Division of the Bank from 1960-62; and as Senior Staff, National Bureau of Economic Research (1965-1973). Jack is presently co-director of the Zell/Lurie Real Estate Center's International Housing Finance Program. Jack's research interests include the reform of financial institutions, financial markets, and central banking institutions; innovations in monetary policy, real estate finance, housing economics, and commercial banking; and the restructuring of bank practices

EUROCATALYST 2007: LIVE FROM MADRID

and lending procedures for the Federal Reserve, insurance firms, pensions groups, and savings and loan associations, including the design of unique mortgage instruments. Jack's consulting activities complement his research interests. His domestic clients include JP Morgan Securities, the Guild Mortgage Company, the Federal Home Loan Mortgage Association and the Mutual Savings Central Fund. His international experience includes consulting for USAID, the International Monetary Fund, New Zealand Bankers, the World Bank and the United Nations. Jack is the Co-Founder of GHR Systems, an innovative software company specializing in point-of-sale and other mortgage management systems. His popular website, Mortgage Professor, is one of the most visited interactive information sites for mortgage borrowers. He has an extensive list of publications on banking and finance, and was the editor of Housing Finance Review. Jack received a B.S. from Purdue University in 1948, a M.S. from Columbia University in 1949, and a Ph.D. from Columbia in 1958.

SIMON HAYES: Simon Hayes is a UK Economist and Director in Barclays Capital’s Global Research Division. Simon joined Barclays Capital in 2005 after eight years working at the Bank of England. While at the Bank, Simon performed several roles, including author of the quarterly Inflation Report and Senior Financial Economist in the International Finance Division. Simon was also responsible for briefing the Monetary Policy Committee on the near-term outlook for inflation and growth ahead of the Committee’s monthly interest rate meetings. Simon has a BA in Economics and a PhD from Newcastle University, and an MSc in Economics from Warwick University.

GLORIA HERNANDEZ graduated from the Complutense University in Madrid in 1981 with a degree in economics.

Gloria then joined the Spanish civil service as a senior economist. After 4 years in the Trade Department of the Finance Ministry, she moved to the Treasury. In 1994, she was promoted to deputy director for government securities at the Treasury. In 1999 she was appointed head of Spanish Treasury, reporting directly to the vice finance minister. She was also a member of the Board of Directors of CNMV (Spanish Securities and Exchange Commission) and of the Bank of Spain. Gloria also served as a full member of the EU European Financial Committee representing Spain. As CFO of Banco Pastor since November 2003, she is in charge of the bank's Treasury, funding policies, ALM analysis, and capital requirements coverage.

STUART JENNINGS is a managing director in the European structured finance group at FitchRatings in London. Stuart heads the agency's European residential mortgage-backed securities group. Prior to joining Fitch in 1999, Stuart was an associate in the asset securitisation group at Credit Suisse First Boston and before that was an audit manager at KPMG. Stuart earned his BA degree in accounting and French at the University of Kent at Canterbury. He is also a qualified chartered accountant.

Domenia Credit, the No. 1 specialist mortgage lender in Romania, was acquired by GE Money in September 2006.

IGOR KOUZIN (DELTACREDIT): Igor has more than a decade of international business experience focusing on growing high-performance organizations. His background spans areas of operations, corporate development, venture capital, and general management. Before joining

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16 DeltaCredit, Igor was the vice president of international markets at Sanchez Computer Associates, Inc., a global provider of banking technology, where he managed the company's operations in CEE and Asia. Igor was also the managing director of Profile Venture Partners, a U.S.-based venture capital firm where he was responsible for creating and growing companies serving the financial services industry worldwide. Igor co-founded Profile Venture Partners after a career at McKinsey & Company in Toronto and Washington, D.C. He earned his MBA from the University of Chicago Graduate School of Business.

DR. MICHAEL J. LEA is an independent consultant with more than 25 years of financial services experience, including 20 years of international experience in 30 countries. He has provided advice on the creation of market-based housing finance institutions, policies and systems as a consultant to international development agencies, government-sponsored enterprises, trade groups, regulatory agencies and major private sector financial institutions in Europe, the U.S. and emerging markets. Michael has conducted executive training programs in housing finance, analyzed primary and secondary mortgage markets in developed and emerging markets and conducted major studies of European and North American systems of residential and commercial property finance. Michael has held a number of key positions with influential housing finance institutions. He has served as Executive Vice President for Global Markets at Countrywide Financial Corporation, President of Cardiff Consulting Services, Senior Vice President of Finance at the Imperial Corporation of America and Chief Economist of Freddie Mac. He was also a Brookings Institution economic policy fellow at the U.S. Department of Housing and Urban Development. He is an internationally known authority on housing and mortgage finance. He has published more than 70 articles and book chapters, organized several conferences and made numerous presentations to a wide variety of organizations. He has taught at Cornell University, the University of California San Diego, San Diego State University and the Wharton International Housing Finance Program at the University of Pennsylvania. He received his Ph.D. in economics from the University of North Carolina, Chapel Hill.

TED LORD is the managing director and head of covered bonds at Barclays Capital. Based in Frankfurt, Ted originates benchmark covered bond issues and markets them worldwide to institutional investors. He has worked with a variety of central banks and governments in developing their covered bond legislation. A Harvard graduate, Ted has held senior banking positions in New York, San Francisco, Sydney, Melbourne, and Auckland, New Zealand before moving to Frankfurt DAVID LYKKEN is the president and managing partners of Mortgage Banking Solutions. As a national mortgage industry consultant with over 33 years experience in mortgage banking, David is a highly sought after speaker and has appeared on "You and Your Money", a nationally syndicated radio program in the U.S. He consults on warehouse lending, broker-to-banker, loan sales, investor relations and marketing. Previously, David founded two regional mortgages banking companies and partnered in a national mortgage company in California. David and his wife, Nancy, have been married 22 years, have two daughters and live in Austin, Texas.

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JOHN MALONE is the CEO of Premier Mortgage Systems, the UK's No. 1 broker. In 2006, the British Mortgage Association presented John with the Life Time Achievement award.

ANGEL MAS is President of Genworth Financial’s European Mortgage Insurance operations. He is focused on growing the operations, exploring untapped opportunities and supporting in-country teams as they build their local businesses. Prior to this role, Angel was Managing Director & Commercial Leader for the Payment Protection Insurance (PPI) business, heading sales and business development globally and kicking off its structured deals strategy. He joined Genworth’s former parent company, GE, more than a decade ago, working with their corporate audit team before accepting a role as GE Financial’s General Manager for Southern Europe (now Genworth’s Payment Protection business) in 2000. In 2004, he was appointed SVP for the Corporate Development Protection Segment, where he helped to establish businesses in Eastern Europe, Mexico, Turkey and Canada. Angel started his career at the Spanish Ministry of Economy assigned to the Spanish consulate in Hong Kong. Following this role he moved to the Asia Pacific division of Banco Santander leading many of the group's financing areas from its Hong Kong, Beijing and Manila offices. Born in Spain in 1968 he holds a BA (hons) degree in Business Administration from ICADE in Madrid and from Middlesex University in London. He is based in London, UK. TONI MOSS: Toni is the founder and CEO of EuroCatalyst.

She has an entrepreneurial background in corporate strategy, marketing, positioning and corporate intelligence that extends across the value chain of mortgage market activities. Initially a screenwriter (which explains the theatrical elements of EuroCatalyst events), Toni's career rapidly progressed into corporate and political speechwriting based on her exceptional research, literary and persuasive skills. She was an active member of Southern California’s digital technology and biotech communities in the early 1980s. Adept at predicting early trends and market convergence, Toni began creating corporate strategies for the U.S. banking, financial services and structured finance industry in the late 1980s through her advisory firm I Cubed Information Strategies. In the early '90s Toni was co-founder and co-CEO of a due diligence firm which specialised in the acquisition and disposition of non-performing loan portfolios following the U.S. savings and loan crisis. Among other accomplishments, the firm was a sub-contractor for seller due diligence on the FHA/HUD sales, which were the largest series of loan sales in US banking history. Toni later founded IntellAgents Inc., which created and implemented new origination, distribution and servicing models, and identified acquisition candidates for IPO spinouts for investment banking and private equity firms. In 1998 she transitioned to Europe, becoming the Director for International Business Development for Bouwfonds and its subsidiary STATER, headquartered in the Netherlands. In this role, Toni was responsible for mapping out market dynamics and strategy for all major European mortgage markets and was instrumental in the global branding, market positioning and expansion strategy of STATER as Continental Europe’s first and leading pan-European third-party servicer. Toni's extensive knowledge, operational experience and presence in so many European countries led to the synonymous association of her name with pioneering efforts at cross-

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17 border mortgage initiatives prior to the launch of the euro. In 2000 Toni established EuroCatalyst as a strategic advisory firm exclusively focused on accelerating cross-border lending in Europe. She was the first to write extensively on the globalization and convergence of mortgage markets and was so frequently referred to as “a walking think tank” that in 2002, with the assistance of EuroCatalyst co-founder Shirley Jackson, she created one. As a child, Moss was considered one of the greatest talents in tennis by the world’s top coaches in the 1970’s. Her brief career ended at the age of 16 with a severe knee injury. This explains why she frequently uses a cane to walk, is limited in her choice of shoes and has some of the most unusual stories one has ever heard about childhood. She is also a talented writer known for her essays, epistles and Blackberry-defying e mails. Toni is a unique voice and personality in the financial services industry. She embodies a rare ability to lead, and effect change on interpersonal, corporate and industry-wide levels.

She is best at providing the context in which brands, ideas or concepts can take flight. Toni resides in Naarden Vesting in the Netherlands and Dublin, Ireland. She is from Austin, Texas (which explains everything).

MARCO PESCARMONA co-founded Gruppo MutuiOnline in 2000 and is currently Chairman of the Group and CEO of the Broking Division. Marco graduated cum laude with a degree in electrical engineering from the Turin Polytechnic Institute in 1993, and holds a second degree in information sciences from the University of Turin, from which he graduated cum laude in 1996. He also earned in 1998 an MBA from the MIT Sloan School of Management in Cambridge, Massachusetts. He worked as a consultant in the Milan office of McKinsey & Company, focusing on the insurance and banking industries. Formerly he worked in the Fixed Income Derivatives desk of Morgan Stanley in London.

EDWARD REGISTER is Senior Director of European Structured Finance for Fitch Ratings. He is responsible for rating servicers of structured finance products such as residential and commercial mortgage-backed securities, as well as for the further development of the European servicer-rating programme. Before joining Fitch in June 2004, Eddie worked with various commercial mortgagebacked securities servicers in the US, including nearly six years heading the commercial mortgage loan operations area for JP Morgan in Atlanta, Georgia. Most recently he was vice president, asset servicing for Trimont Real Estate Advisors. Edward has a BS in History and English from Mercer University.

CARMEN RETEGAN: Carmen is a dynamic business leader with strong expertise in Romanian mortgage developmental work, regulatory initiative and effective cooperation with private, administrative and governmental institutions. As Executive Director and CEO of GE Money Bank (Romania), formerly Domenia Credit, she is responsible for the company’s overall business strategy and activities. Carmen defined and implemented the operational, funding and legislative strategy that resulted in the creation of Romania’s mortgage lending program at the end of 2001 and, ultimately, the creation of Domenia Credit in February 2003.

She was previously Equity Market Director at Creditanstalt Investment Bank Romania. Her career also includes experience in MBS pricing and portfolio management while working as MBS/CMO portfolio structuring coordinator at Seattle Northwest Securities. Carmen holds an MBA from the

EUROCATALYST 2007: LIVE FROM MADRID

Romanian-Canadian MBA Program in Bucharest, and spent a year specializing in finance within the MBA program at the William E. Simon Graduate School of Business Administration at the University of Rochester, NY. RON ROARK is Chief Executive Officer of Crown Northcorp, the parent company of Crown Westfalen Bank, which Crown acquired from HypoVereinsbank in October 2006. The Crown Group provides services to real estate and associated debt capital markets. Clients include investment banks, commercial banks and other third party providers. In 1995, Ron led the expansion of Crown's business into Europe where, among other things, Crown was instrumental in developing two of the largest real estate transactions in Sweden, providing financial advisory and asset management service to buyers together with local partners.

Ron has also built up stable mortgage management operations in Europe, most recently through the establishment of Crown Westfalen Credit Service in Germany, and has expanded the concept of master servicing at the panEuropean level. Currently, the scope of Crown's services includes mortgage servicing, mortgage origination and asset management of real estate interests. Crown Westfalen Bank supervises all of Crown's servicing operations and plays a central role in further developing Crown's interests in the field of mortgage origination. Ron has always been a driving force in the industry. He is a past board member of the Commercial Mortgage Securities Association (CMSA) and formerly served as Chair of CMSA International Committee.

He is also active in other industry groups, including the Urban Land Institute (ULI), the Turnaround Management Association (TMA) and the Mortgage Banker's Association (MBA).

DAVID RYAN is Group Chief Executive of the Statefirst Group. He has extensive first-hand knowledge and experience of mortgage lending and financial services, drawn from four different continents. He has built and sold several major corporate businesses, including Ireland's 2nd largest telecommunications provider, Spirit, to BT in 2001.

DENNIS W. SHEEHAN leads all GMAC-RFC businesses in Continental Europe relating to mortgage conduit operations for mortgage origination, lending and securitization. GMACRFC has issued over €10 billion in residential mortgage backed securities from its origination franchises in Holland, Germany, Spain and France. Sheehan has held a number of senior positions within General Motors since joining the company in 1986 after graduating from University of Chicago Graduate School of Business. After senior roles in General Motors Treasury, he joined GMAC as Chief Financial Officer for the Mortgage Group. Subsequently, he was elected Chief Financial Officer of GMAC International Operations before moving to run GMAC-RFC Continental European businesses in 2002.

TIM SKEET is the Managing Director for debt capital markets and covered bonds at Merrill Lynch. A Cambridge graduate with a degree in German and French, Tim joined the City in 1981 as a structured leading banker with Samuel Montagu. He moved over to the Capital Markets side of the business in the mid-1980s and became involved with the early capital adequacy rules and securitisation initiatives in the UK. His career took him to Morgan Stanley before he joined Kidder Peabody in 1991 to rebuild European Capital Markets Origination of senior Financial Institution coverage roles with a few firms during the period of rapid change in

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18 the investment banking world of the late 1990s, including a period at Barclays Capital, before going to ABN AMRO in early 2003. Tim, who is married with three children, is also a pilot and extreme aviation journalist and photographer.

JUAN PABLO SORIANO joined Moody's Investors Service in New York in 1994 and is currently based in Madrid as Managing Director for EMEA Covered Bonds. He is also country manager for Spain and Portugal. Prior to joining Moody's, Juan Pablo held various responsibilities first at a Stock Broker Agency and then in the New York branch of the Banco Central Hispanoamericano back in 1988, in a diverse range of positions including Money Market Manager,

Assistant Vice President in the Loan & Investment Department and Vice President in the Trade Finance Department. In 1993 he was transferrred to Madrid as Vice President of the Fixed Income Department. Juan Pablo is a graduate in Law from the Universidad Complutense of Madrid, Spain, and holds an MBA in Finance from the Leonard Stern School of Business (NYU).

DOMINIC SWAN is a Managing Director at HSBC Bank plc.

He previously spent almost 10 years at Moody's Investors Service where he was rating committee chairman for SIVs, various MBS markets, Moody's EMTN desk, and Structured Covered Bonds.

globalisation of markets: mergers, acquisitions, warehouse lines, investment banks and other market activities since 1993 IT IT UK US IT UK IT US US US US US NL US US US US US US UK IT US IT IT MY IT UK UK US US US NZ

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event Deutsche Bank acquires Banca Popolare di Lecco Deutsche Bank acquires Prestitempo Kensington Mortgages established by American expat Martin Finegold Lehman Brothers purchases Aurora Loan Services Milano Centrale enters partnership with Morgan Stanley Real Estate Funds Mortgages PLC (set up in 1997) launches as non-conforming lender in the UK market Morgan Stanley Real Estate Funds acquires Fonspa from BCI Comit and Unicredito Lehman invests $6 million for 75% share in BNC Mortgage Federal Open Market Committee lowers federal funds rate by 50 basis points to 6 percent Federal Open Market Committee lowers federal funds rate by 50 basis points to 5.5 percent Federal Open Market Committee lowers federal funds rate by 50 basis points to 5 percent Federal Open Market Committee lowers federal funds rate by 50 basis points to 4.5 percent GMAC-RFC introduces risk-based pricing to the Dutch market with the formation of GMAC Hypotheken Federal Open Market Committee lowers federal funds rate by 50 basis points to 4 percent Federal Open Market Committee lowers federal funds rate by 25 basis points to 3.75 percent Federal Open Market Committee lowers federal funds rate by 25 basis points to 3.5 percent Federal Open Market Committee lowers federal funds rate by 50 basis points to 3 percent Federal Open Market Committee lowers federal funds rate by 50 basis points to 2.5 percent Federal Open Market Committee lowers federal funds rate by 50 basis points to 2 percent Nikko Principal Investments Limited acquires majority shareholding in Mortgages plc SocGen purchases remaining 50% stake in Finitalia (joint consumer credit subsidiary) from Unicredito Federal Open Market Committee lowers federal funds rate by 25 basis points to 1.75 percent Milano Centrale changes name to Pirelli & C Pirelli & C acquires Pirelli & C Credit Servicing HSBC acquires ABN Amro Bank Berhad's retail mortgage portfolio (book value $65.8 million) of 2,300 accounts Meliorbanca begins residential mortgage lending with exclusive agreement with Divisione Mutui Kensington Mortgages acquires The Mortgage Lender Lehman Brothers acquires Southern Pacific Mortgages Ltd Federal Open Market Committee lowers federal funds rate by 50 basis points to 1.25 percent Lehman exercises option to buy BNC outright HSBC buys Household International (US subprime lender and oldest consumer finance company in US) for $15.5 billion HSBC acquires AMP Bank Limited's NZ retail mortgage assets and deposits for $15 million (25,000 customer accounts) Federal Open Market Committee lowers federal funds rate by 25 basis points to 1.00 percent, its lowest level since the 1950s Crown Mortgage Management creates Rooftop Mortgages as specialist lender with warehouse line from Bear Stearns Lehman Brothers acquires Preferred Mortgages from Barclays Private Equity Infinity Mortgages is launched as a specialist nonconforming lender Divisione Mutui renamed Systema Mutui Lehman Brothers sets up ELQ Hypotheken, a subprime nonconforming lender, in the Dutch Market JP Morgan Chase pays $58 billion for Bank One (completed 1 July 2004) HVB Europe sets up Redstone Mortgages Plc as a special purpose company to participate in the secondary loan sales market in the UK, purchasing pools of residential mortgage loans and funding them via securitization.

Kensington invests £1 million to acquire a minority stake in Money Partners Limited with the option to purchase the rest of the business equity over the next four years.

Freedom Funding is launched as UK specialist lender with backing of Freedom Finance The US Federal Reserve starts a cycle of interest rate rises that will lift borrowing costs from 1 percent, to the current level of 5.25 percent. It raises its target for the federal funds rate by 25 basis points to 1.25 percent. The central bank will go on to increase interest rates 16 more times in a row as it tries to slow inflation. It pauses in June 2006, and has not lifted borrowing costs from 5.25 percent since then.

The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 1.50 percent

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date 1-Nov-93 1-Jan-94 1-Nov-94 1-Jan-97 1-Jan-97 1-Mar-98 1-Jan-00 1-Aug-00 3 Jan 01 31 Jan 01 20 Mar 01 18 Apr 01 7-May-01 15-May-01 27-Jun-01 21-Aug-01 17-Sep-01 2-Oct-01 6-Nov-01 1-Dec-01 1-Dec-01 11-Dec-01 2002 2002 1-Mar-02 1-Jun-02 1-Jul-02 1-Sep-02 6 –Nov-02 1-Mar-03 1-Mar-03 1-Apr-03 25 Jun-03 1-Oct-03 1-Dec-03 2004 2004 2004 15-Jan-04 1-Apr-04 1-May-04 1-May-04 30-Jun-04

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19 US rate hike UK acquisition IE US

investment rate hike merger US rate hike UK acquisition NL funding IT creation IT US US UK US IT US US IT US US

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The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 1.75 percent Merrill Lynch acquires Mortgages plc (from Nikko Principal Investments Limited, majority shareholder) , Genesis Home Loans Plc (owned by Mortgages plc), and Wow! Mortgages & Loans (owned 50% by Mortgages plc in joint venture with Mortgageforce) Kensington takes 64% stake in Irish subprime lender Start Mortgages The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 2 percent Banco Santander and Abbey National reach agreement on merger (acquisition) The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 2.25 percent.

Bear Stearns acquires Rooftop Mortgages (subprime $1.7 billion in 2006) Citigroup provides funding for the creation of Sparck Hypotheken in the Dutch market GE Money set up as mortgage lender in Italy Prestitempo enters mortgage space with new line of mortgage products called Mutuo Pratico for new homes, renovation, refinancing The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 2.50 percent The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 2.75 percent.

Bear Stearns acquires ownership stake in Essex & Capital Mortgage Corp. Limited (subprime broker) Bear Stearns starts Bear Stearns Residential Mortgage Corp.

Macquarie Bank establishes mortgage business in IT HSBC integrates Household International with North American group operations under HSBC Finance Corporation The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 3 percent.

UniCredit buys HVB for €15 billion The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 3.25 percent.

GE Consumer Finance acquires 25.5 percent stake in Turkey's Garanti Bank Moody's revises its overcollateralization floor for subprime mortgage transactions that include a mix of asset types, such as manufactured housing loans, to increase the level of protection for investors in RMBS The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 3.50 percent.

Wachovia buys AmNet Mortgage (nationwide resi broker in California) for $83 million.

Merrill Lynch buys 20 percent stake in Ownit Mortgage Solutions Inc for $100 million and $2.5 billion warehouse lending facility The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 3.75 percent.

Professional Mortgage Packagers Alliance launches Unity Homeloans as a joint initiative with South African investment bank Investec The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 4 percent.

Morgan Stanley acquires UK packager Advantage Homeloans The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 4.25 percent.

Bear Stearns acquires Bearimmo (subprime origination, monthly origination of $25 million) The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 4.50 percent BNP Paribas completes €9 billion purchase of Banca Nazionale del Lavoro Amber Homeloans (Skipton Building Society) launches adverse mortgage range through distributor Optoma Fortress buys Centex Home Equity (subprime) from Centex Corp. for $575 million. Sale completed in July 2006 and unit is renamed Nationstar Mortgages Investec purchases 100 million mortgage loan book from Amber Homeloans as part of strategy to build 1 billion portfolio of subprime mortgages The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 4.75 percent Lehman completes acquisition of London Mortgage Company, Lehman's third UK specialist lender German bank West LB establishes UK-based Basinghall Finance with the acquisition of three portfolios totalling £650 million from Scarborough Building Society.

Deutsche Bank launches specialist lender db mortgages Kensington Mortgages acquires minority stake in Swedish nonconforming lender Bluestep for £2.7 million. Other institutional investors include Barclays Oakwood acquires 80 percent of Ktesios SpA (salary-secured loans) Wachovia acquires American Property Financing for $3 billion from Emigrant Bank (servicing portfolio of $8 billion) The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 5 percent.

Barclays buys HomEq Servicing from Wachovia for $469 million Meliorbanca sells its equity in Systema Mutui indirectly to Lehman Brothers (through Sy SRL) for €51 million, and agrees to distribute all its mortgages through Systema Mutui for six years Morgan Stanley acquires Fonspa from MS REF Pirelli & C signs agreement with Calyon to form joint venture (Pirelli 33 percent Calyon 66 percent) to invest in European NPLs BBVA purchases Texas Regional Bancshares (holding company for Texas State Bank) for $2.2 billion and State National Bank for $480 million The Federal Open Market Committee raises its target for the federal funds rate by 25 basis points to 5.25 percent.

Merrill Lynch acquires Freedom Funding Ltd, which becomes part of ML's Global Residential Real Estate Group BBVA buys100 percent of Advera (consumer finance company), now called BBVA Finanzia SpA BBVA buys Maggiore Fleet (auto-leasing) for €67 million Credit Agricole signs agreement with Fiat to set up 50-50 auto finance joint venture Deutsche Bank completes acquisition of Chapel Funding, California-based mortgage originator. (Agreement reached in May 2006) Servicing and origination functions to be operated under db home lending as part of DB's Global Markets RMBS platform Santander buys 90 percent of Drive Financial (subprime auto-financing company) for $651 million from HBOS edeus is launched by Oakwood Financial Wachovia completes acquisition of Golden West Financial (California mortgage specialist) for $26 billion (deal in June 2006) Oakwood acquires all of Ktesios SpA Kensington increases equity stake in Money Partners from 37.5 percent to 57.5 percent. Additional equity was purchased at an initial cost of £13.1m with deferred consideration of up to a maximum of £11m due in 2009, depending on performance.

Deutsche Bank, in a joint venture with Hispanic National Mortgage Association, sets up HNMA Funding in San Diego to offer loan programs for Hispanic and other immigrant borrowers in the US Morgan Stanley completes acquisition of Saxon Capital (servicer and originator) in US for $706 million Merrill Lynch acquires First Franklin mortgage origination franchise and related servicing platform from National City

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Corp. for $1.3 billion (agreement in Sept 2006) HSBC profits plummet on US subprime woes Fortress buys nonprime origination platform of Champion Mortgage from KeyCorp for $200 million Morgan Stanley acquires CityMortgage Bank, Russian bank specialising in originating, servicing and securitising residential loans in the Russian Federation, for $300 million Pirelli completes acquisition of Credit Servicing from Morgan Stanley RE Ownit Mortgage Solution files for bankruptcy Wachovia buys 70 percent of ECM for estimated €750 million) Lehman Brothers reportedly reaches tentative agreement to assume Mortgage Lender Network's wholesale operations Lehman Brothers completes purchase of Capital Crossing Bank for $210 million (agreement signed 20 Sept 2006) Deutsche Bank acquires MortgageIT of New York for $430 million as a key element of Deutsche's build-out of a vertically integrated mortgage origination and securitization platform. (Agreement in July 2006) MortgageIT licensed to originate resi mortgages in all 50 states. Employs 2,100 people in 47 branches.

Merrill Lynch forms joint venture with Irish Life & Permanent to set up mortgage originator Springboard Mortgages Intesa SanPaolo is set up Merrill Lynch and CIR (Compagnie Industriale Riunite) SpA (controlled by Compagnia Finanziaria de Benedetti) each acquire 47.4 percent of Oakwood Financial Bear Stearns agrees to purchase of Encore Credit Corp (subprime unit of ECC Capital Corp, based in California) for $26 million (agreement in Oct 2006) Merrill Lynch and COFIDE conclude agreement for Merrill to take 39 percent stake in Societa Finaza Attiva, which is renamed Euvis SpA Deutsche Bank Polska enters consumer finance market by setting up db kredyt with 22 branches (expanding to 60 by end of 2nd quarter) BBVA purchases Compass Bancshares for $9.6 billion HSBC issues first profit warning as bad debt provision from UK mortgage lending spirals Credit Suisse to buy most of assets of ResMAE Financial (subprime originator and lender) for $19 million as part of ResMAE's bankruptcy reorganization ResMAE Mortgage Corp., US subprime lender, files for bankruptcy Nova Star Financial reports a surprise loss Intesa San Paolo hands over 29 former Banca Intesa branches to FriulAdria (part of earlier agreement) and sells FriulAdria shares to Cariparma, which controls FriulAdria, for €136 million Intesa San Paolo signs contract with Credit Agricole on sale of all equity in Cassa di Risparmio di Parma (Carisparma) for €3.8 billion and in Banca Popolare FiulAdria for €836.5 million, as well as sale of 202 former Banca Intesa branches for €1.3 billion The Federal Reserve announces draft regulations to tighten lending standards. Lenders would be required to grant loans on a borrower's ability to pay the fully indexed interest rate that would apply after the low, initial fixed-rate period of two or three years. New regulations are met with scepticism in Congress.

Fremont General stops making subprime loans and puts its subprime business up for sale.

New Century Financial, the second largest subprime lender in 2006, stops making loans.

New Century Financial share trading suspended Accredited Home Lenders Holding says it will pass on $2.7 billion of money loaned - at a heavy discount - in order to generate some cash for its business People’s Choice files for bankruptcy.

At a Joint Economic Committee hearing, Ben Bernanke, Chairman of the Board of Governors of the Federal Reserve System, says housing market weakness "does not appear to have spilled over to a significant extent.” And "At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained. In particular, mortgages to prime borrowers and fixed-rate mortgages to all classes of borrowers continue to perform well, with low rates of delinquency.”

Barclays buys EquiFirst Corp (12th largest subprime wholesale mortgage originator in US) from Regions Financial.

Initial price was $225 million (Jan 2007), but cut to $76 million Societe Generale reported in merger talks with UniCredit New Century Financial files for Chapter 11 bankruptcy protection after it was forced by its backers to repurchase billions of dollars worth of bad loans. The company says it will have to cut 3,200 jobs, more than half of its workforce, as a result of the move.

Barclays sells Monument, a subprime credit card business, at a loss to CompuCredit American Home Mortgage writes down the value of risky mortgages rated one step above subprime.

Subprime lender NovaStar Financial says its looking for a buyer Freddie Mac announces plans to refinance up to $20 billion of loans held by subprime borrowers who would be unable to afford their adjustable-rate mortgages at the reset rate.

The National Association of Realtors announces that sales of existing homes fell 8.4 percent in March from February, the sharpest month-to-month drop in 18 years.

Hedge fund Dillon Read Capital is folded back into UBS less than 2 years after it was set up, triggered by a SFr150 million (£62 million) first-quarter loss on US subprime mortgage investments At the Federal Reserve Bank of Chicago’s Forty-Third Annual Conference on Bank Structure and Competition, Chairman Bernanke reiterates his March statement by saying the Fed does not foresee a broader economic impact from the growing number of mortgage defaults.

Shares in Bear Stearns come under pressure as questions are raised about the investment bank's exposure to the subprime market in the US. The National Association of Realtors reports that sales of existing homes fell by 2.6 percent in April to a seasonally adjusted annual rate of 5.99 million units, the slowest sales pace since June 2003. The number of unsold homes left on the market reached a record total of 4.2 million.

South African investment bank Investec pays £283 million for Kensington Mortgages Merrill Lynch seizes and sells $800 million (£400 million) of bonds that are being used as collateral for loans made to Bear Stearns' hedge funds.

Accredited Home Lenders Holding enters merger agreement with Lone Star Fund ZipRealty Inc., a national real-estate brokerage firm, announces that the number of homes listed for sale in 18 major US metropolitan areas at the end of May was up 5.1 percent from April. This is a striking deviation from the general trend as tracked by the Credit Suisse Group, which says on a national basis, inventories of listed homes have typically been little changed in May during the past two decades.

Barclays reportedly preparing to sell FirstPlus, a sub-prime consumer loan business Reports emerge that Bear Stearns is liquidating its assets in a hedge fund that made large bets on the US subprime

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Goldman Sachs reports flat profit from a year ago due to mortgage market problems.

Bear Stearns says it will provide $3.2 billion in loans to bail out one of its hedge funds, the High-Grade Structured Credit Strategies Fund, due to bad bets on subprime mortgages. The bailout of the fund would be the largest by a bank in almost a decade. Analysts have also been questioning the position of another fund, the High-Grade Structured Credit Strategies Enhanced Leverage Fund.

Queen's Walk Fund, Queen's Walk Investment, a listed vehicle founded by Cheyne Capital Management, says that it lost €67.7 million in the year ending 31 March because of a sharp decline in the value of its UK and US mortgagelinked securities holdings. Queen's Walk invests solely in first-loss pieces Reports emerge that Bear Stearns will have to rescue a second hedge fund as rival banks refuse to help in bailing it out.

Bear Stearns hires a new head of asset management to find out what went wrong at its hedge funds.

Caliber Global Investment, hedge fund run by Cambridge Place, sells assets after £4.4 million losses on subprime Credit Suisse to acquire Lime Financial Services (wholesale nonprime resi lender in Oregon) The UK's Financial Services Authority says it will take action against five brokers that sell subprime mortgages, claiming they offer loans to people who should not be given them.

Datamonitor says UK subprime mortgages are set to grow faster than mainstream mortgages, with the market worth some £31.5bn by 2011.

Standard and Poor’s places credit ratings on 612 classes of RMBS backed by US subprime collateral on CreditWatch Negative Moody's downgrades 399 subprime RMBS issued in 2006, places 32 more on downgrade review; These 2006-issued RMBS are backed primarily by first lien adjustable- and fixed-rate subprime mortgage loans. Ratings were placed under review and downgraded based on higher than anticipated rates of delinquency in the underlying collateral compared to current credit enhancement levels.

Moody's takes rating actions on 127 on subprime second-lien RMBS originated in 2005; 52 downgrades US industrial firm General Electric decides to sell the WMC Mortgage subprime lending business that it bought in 2004.

"The mortgage industry has greatly changed since the purchase of WMC," says its chief Laurent Bossard.

The Federal Reserve announces a pilot program to monitor brokers, joining the Board of Governors of the Federal Reserve with the Office of Thrift Supervision, the Federal Trade Commission, and state agencies represented by the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, to conduct targeted consumer-protection compliance reviews of underwriting standards, oversight, and risk-management practices within non-depository lenders with significant subprime mortgage operations.

Bear Stearns announces its two hedge funds that invested heavily in the subprime market are essentially worthless, having lost over 90 percent of their value, equal to over $1.4 billion.

Commerce Department announces housing starts are down 19.4 percent over the last 12 months. Also announced is a 7.5 percent plunge in permits to build new homes, the largest monthly decline since January 1995. Permits are 25.2 percent below their level a year ago, reflecting continued pessimism among builders over the near-term outlook for new homebuilding.

In two days of testimony in Congress, Bernanke said there will be “significant losses” due to subprime mortgages, but that such losses are “bumps” in “market innovations” (referring to hedge fund investments in subprime mortgages).

Bernanke reiterated that problems in the subprime mortgage market have not spilled over into the greater system.

Bernanke also said the problems “'likely will get worse before they get better.” He forecasts that the economy is poised for moderate growth, but continuing problems in the housing market prompt the Fed to slightly reduce its growth expectations.

Standard and Poor's downgrades 418 closed-end second-lien RMBS classes Beverly Hills plastic surgeon files lawsuit against Moody's claiming that Moody's gave excessively high ratings to bonds backed by subprime mortgages and as a result, Moody's stock price was artificially inflated.

Bernanke warns that the crisis in the US subprime lending market could cost up to $100bn.

AXA Investment Managers closes £460m subprime related fund to new investors Moody's downgrades 22 tranches issued by CSFB "HEAT" and place 32 on review for possible downgrade. The deals have experienced an increasing rate of severely delinquent loans with the recent pace of losses eroding overcollateralization below targeted levels. The collateral backing each deal consists primarily of first-lien, subprime fixed and adjustable rate mortgage loans.

FitchRatings predicts massive loan refinancing (more than half of $1.3 trillion leveraged loan market) Bear Stearns seizes assets from one of its problem-hit hedge funds as it tries to stem losses.

Alliance Boots and Chrysler fail to find buyers for £10bn of debt to fund buyouts Worries about the subprime crisis hammer global stock markets and the main US Dow Jones stock index loses 4.2 percent in five sessions, its worst weekly decline in almost five years.

FT reports that Germany puts rescue fund in place to shore up IKB Deutsche Industriebank, Europe's first big casualty of the US subprime crisis; a pledge to guarantee obligations of more than €8 billion (£5.4 billion) – more than five times IKB's stock market value German lender IKB issues profits warning linked to subprime lending. CEO quits Bear Stearns stops clients from withdrawing cash from a third fund, saying it has been overwhelmed by redemption requests. The lender also files for bankruptcy protection for the two funds it had to bail out earlier.

Home prices continue to fall, marking the 18th consecutive decline, beginning in December 2005, in the growth rate of housing prices, according to the monthly S&P/Case-Shiller's Home Prices Indices, which tracks housing prices in metropolitan areas and is considered a leading measure of US single-family home prices. The 10-City Composite index showed an annual decline of 3.4 percent (its biggest since 1991) and the 20-City Composite reported an annual decline of 2.8 percent.

Moody's Investors Service announces that it is refining its methodology for rating residential mortgage securitizations backed by Alt-A mortgage loans, including Option ARM loans.

Two hedge funds managed by Bear Stearns that invested heavily in subprime mortgages declare bankruptcy. Investors in the funds file suit against Bear Stearns, alleging that the investment bank mislead them about the extent of the funds’ exposure.

Macquarie Bank says two of its funds face losses of 25 percent US stock markets fall heavily, with the main Dow Jones Index ending the session 2.1 percent lower, amid fears about how many financial firms are exposed to problems in the subprime market. A top Bear Stearns executive says credit markets are in the worst turmoil he has seen in 22 years. London's main FTSE 100 stock index closes down 1.2 percent at 6,224.3, with French and German markets also declining.

Bear Stearns co-president Warren Spector steps down, as the lender looks to restore investor confidence following the problems with its subprime exposure.

American Home Mortgage, one of the largest US independent home loan providers, files for bankruptcy after laying off the majority of its staff. The company says it is a victim of the slump in the US housing market that has caught out

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many subprime borrowers and lenders German Bank Sal Oppenheim temporarily freezes a € 750 million asset-backed credit fund, closing it until further notice after worried investors pull out €100 million from the fund.

WestLB Mellon Asset Management suspends issuance and redemption of shares in WestLB Mellon Compass Fund ABS Fund, because lack of market liquidity "renders its impossible to determine a fair net asset value" The Federal Open Market Committee leaves the overnight federal funds rate at 5.25 percent, referring to tightening in the credit markets and ongoing housing market crisis as a “correction”. Despite financial market turmoil, the FOMC forecasts that “the economy seems likely to continue to expand at a moderate pace over coming quarters, supported by solid growth in the employment and incomes and a robust global economy.”

Senator Clinton introduces a plan to address mortgage lending abuses, including new regulations on brokers, strong state licensing standards, and federal registration for brokers. The plan also proposes a $1 billion fund to assist state programs that help at-risk borrowers avoid foreclosure.

Standard and Poor's places 207 Alt-A RMBS classes on CreditWatch Negative DB Mortgages withdraws the full range of loans it offers to homebuyers with poor credit records, informing mortgage brokers it wants to reconsider the interest rates it demands French bank BNP Paribas suspends three investment funds worth €2 billion (£1.4 billion), citing problems in the US subprime mortgage sector. BNP says that it cannot value the assets in the fund, because the market has disappeared.

Dutch bank NIBC announces losses of €137 million from asset-backed securities in the first half of this year.

The European Central Bank pumps €95 billion into the eurozone banking market to allay fears about a subprime credit crunch. The US Federal Reserve and the Bank of Japan take similar steps.

American International Group, one of the biggest US mortgage lenders, warns that mortgage defaults are spreading beyond the subprime sector. With delinquencies becoming more common among borrowers in the category just above subprime.

President Bush addressing the housing market crisis, saying, “The fundamentals of our economy are strong… I'm told there is enough liquidity in the system to enable markets to correct.” Bush also said, “The conditions for the marketplace working through these issues are good. My hope is that the market, if it functions normally, will be able to yield a soft landing.”

London's FTSE 100 index has its worst day in more than four years, closing 3.7 percent lower.

The European Central Bank provides an extra €61 billion of funds for banks.

The Federal Reserve Board says it will provide as much money as is needed to combat the credit crunch.

WestLB admits to credit exposure. The publicly-owned Landesbank became the latest German bank to admit exposure to the US subprime mortgage market (amid) speculation that its US asset management arm Brightwater Capital Management was facing liquidity problems.

DWS, Deutsche Bank's asset management arm, says its ABS Fund had lost 30 percent of its value, mainly because of customer withdrawals, as it fell from €3 billion to €2.1 billion. But unlike many other European banks, it said it would keep it open.

Goldman Sachs says it will pump $2 billion into one of its funds (Global Equity Opportunities) after it loses $1.8 billion The European Central Bank pumps €47.7 billion into the money markets, its third cash injection in as many working days.

Central banks in the US and Japan also top up earlier injections.

Swiss bank UBS warns that the market turmoil is likely to hit its earnings in the July to September period.

Aegis Mortgage files for bankruptcy.

Canada's fifth largest bank, CIBC, writes off C$290 million (£137 million) in mortgage-backed securities hit by slide in US property.

Commerzbank says its exposure as a creditor of US mortgage lender Homebanc, which applied for Chapter 11 bankruptcy protection on 9 August, amounts to a double-digit million euro sum BNP Paribas says its exposure to Homebanc amounts to about €30 million Accredited Home Lenders Holding to pursue lawsuit against Lone Star Funding for failing to complete merger Mortgage lender Rams Home Loans Group says the "unprecedented disruptions" in credit markets may reduce its profit.

Sentinel, US money manager fund, says it will halt redemptions Sal Oppenheim strengthens ties with IKB after increasing stake to 5 percent (from 3 percent) Rep Barney Frank announces plans to hold hearings in the House Financial Services Committee investigating credit rating agencies role in the subprime mortgage crisis.

Hedge fund manager Basis Capital warns losses at one of its funds may top 80 percent.

European Commission is to investigate credit ratings agencies amid growing dismay over their slow response to the subprime mortgage crisis. Officials in Brussels, and many other critics, believe the ratings agencies failed to act quickly enough to warn investors about the risks of investing in securities backed by US subprime mortgages – the sector whose troubles triggered the recent global market volatility.

Kaupthing, the Nordic bank, pays almost $3bn for NIBC, the unlisted Dutch merchant bank owned by a consortium led

by Chris Flowers, the former Goldman Sachs banker, a week after NIBC disclosed substantial losses on investments in US asset-backed securities.

Countrywide Financial, the nation’s largest mortgage lender, draws down $11.5 billion from its credit lines.

Shares in the Australian mortgage lender RAMS Home Loans Group crash 60 percent as the US credit squeeze leaves it unable to refinance $5 billion in debt The US Federal Reserve cuts the interest rate at which it lends to banks by a quarter of a percentage point to help banks deal with credit problems.

Unity Homeloans (Investec) withdraws its subprime range of products Infinity Mortgages (financed by South African investment bank Investec) withdraws its subprime range, effectively shutting down Preferred Mortgages tightens its lending criteria, including reducing its DTI ratio to 50 percent Bank of England makes emergency £314 million loan to an unidentified bank through its standing facility. The standing facility allows banks to borrow unlimited amounts at a penalty rate of 6.75 percent. This is not the first time the credit facility has been tapped; it was last used on 17 July. The loan is not itself unusual as there are occasions when similar amounts have been tapped, even before the current financial market crisis. Hence, the drawdown does not necessarily represent a bailout by the BoE of a financial institution.

Amber Homeloans announces continued commitment to nonconforming market despite market volatility: Gordon Jolly: “Many subprime lenders have taken the decision to protect their own interests, rather than maintain their commitment to intermediary business partners in the face of the threat that the US subprime crash has brought. Amber is sticking with our current fixed rates across our subprime ranges, including our unlimited adverse products.”

Credit card specialist Capital One Financial announces it was scaling back its involvement in home loans by shutting its Virginia-based Greenpoint Mortgage operation at a cost of $860 million (£432 million) with the loss of 1,900 jobs.

US SEC files fraud charges over the demise of Chicago-based Sentinel Management - which was initially thought to be

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another victim of subprime mortgages when it went bankrupt on Friday. According to the SEC's complaint, Sentinel improperly used $460 million of its clients' securities as collateral to borrow $321 million RealtyTrac Inc announces foreclosures were up 93 percent in July 2007 from July 2006. The national foreclosure rate in July was one filing for every 693 households. There were 179,599 filings reported last month, up from 92,845 a year ago.

Arizona-based lender First Magnus files for bankruptcy, leaving almost 6,000 staff out of pocket and jobless.

Countrywide Financial, is cutting 500 jobs largely at Full Spectrum, its subprime arm.

DB Mortgages raises interest rate Lehman Brothers announces plan to shut down BNC Mortgage, its subprime unit, shedding 1,200 jobs Specialist home financing company BuildLoan increases the self-cert limit on two of its intermediary offers to £400,000 for Amber Home Loans and £500,000 for Accord.

Bill Gross - manager of the world's largest bond fund, Pacific Investment Management (PIMCO) - calls on George Bush to intervene.

Northern Rock says it will raise its rates for subprime loans by up to 1.25 percentage points Countrywide CEO says the US economy is on the verge of recession.

The German regional bank SachsenLB is rapidly sold to Germany's biggest regional bank, Landesbank BadenWürttemberg.

Shares in Barclays drop sharply after a report that it had been left with hundreds of millions of dollars worth of exposure to the crisis-hit US mortgage market.

Basis Capital Fund Management of Australia files for bankruptcy protection for its hedge fund, citing defaults in US subprime mortgages Preferred Mortgages increases the rates on its subprime range of mortgages by an average of .65 percent Mortgages PLC raises interest rate German Chancellor Angela Merkel criticises credit ratings agencies for not spotting companies with credit problems.

There has been criticism of the high ratings given to bundles of debt that included subprime mortgages.

Accounting firm H&R Block reveals huge losses at its mortgage arm Option One. Its chief exec likened the current crisis to the Great Depression.

Kathleen Corbet, the president of Standard & Poor's, which has faced strong criticism for its role in the US subprime crisis, resigns Barclays Capital bails out a $1.6 billion (£800 million) Cairn Capital hedge fund Synapse Investment Management becomes the latest market casualty, shutting a €200 million (£135 million) fixedincome fund due to "severe illiquidity", as the gap between the Bank's base rate, 5.75 percent, and the three-month inter-bank lending rate (Libor) reached 1.05 percentage points - its widest since the mid-1980s and a clear sign of the ongoing credit crunch. Synapse reportedly was forced to shut the fund after Sachsen asked for its money back.

The FED and other US agencies issue "Statement of Loss Mitigation Strategies for Servicers of Residential Mortgages" OECD calls on Federal Reserve to cut rates and warns that the US could be heading for recession Bank of England breaks its silence on the markets crisis began, raising its reserves target by 6 percent and saying it could add another 25 percent if overnight interest rates remained high edeus reprices its adverse range with an average rate increase of .65 percent Cheyne Finance, an $8.8 billion (£4.35 billion) investment fund managed by the London-based Cheyne Capital Management, is put into receivership as the short-term credit famine looked set to intensify. Cheyne Finance is a special investment vehicle (SIV) financed by short-term borrowings and invested in subprime mortgages and other assets Lehman announces complete restructuring plan for residential mortgage origination business, including a cut of 850 jobs globally Lehman announces closure of Southern Pacific Personal Loans and London Mortgage Company Lehman announces name change of Aurora Loan Services to Lehman Mortgage Capital Lehman announces Libertus (Japanese origination) and ELQ Hypotheken will also operate under Lehman Mortgage Capital name Countrywide announces plans to lay off up to 12,000 people (20 percent of its workforce) by December Amber Homeloans (Skipton Building Society) removes higher-risk product from market Subprime lender Victoria Mortgages, backed by US venture capital group Venturion Capital, becomes the first British firm to fall victim to the credit crisis as it goes into administration after UBS and Barclays pull their warehouse lines Speculation grows Northern Rock could be the subject of an opportunistic bid from Lloyd's TSB looking to take advantage of its weakened position.

ECB loans a further €75 billion ($104 billion) for three months, a sign that institutions in the money market remain wary of lending to each other for periods of more than a week.

Fitch Ratings places Vertex Mortgage Services Limited's (Vertex) UK residential mortgage primary servicer ratings of 'RPS3+UK(subprime)' and 'RPS3+UK(prime)' on Rating Watch Negative (RWN). The rating watch action follows the recent announcements regarding the closure of London Mortgage Company (LMC) by Lehman Brothers (rated 'AA-' (AA minus)/'F1+'/Outlook Stable) and Victoria Mortgage Funding Limited's (Victoria) entry into administration and the uncertainty these events bring for Vertex at a time of market disruption.

Northern Rock applies to Bank of England for emergency finances.

Countrywide lines up $12 billion of financing to help it weather a housing slowdown it expects to lead to widespread layoffs First Horizon National, the largest bank in Tennessee, says it plans to slash its mortgage sales force by 50 percent (1,500 jobs) Following the BoE bailout of Northern Rock, the Council of Mortgage Lenders emphasises that the issue facing lenders at the moment is one of liquidity and funding, not lending quality.

Reuters reports that Lehman Brothers is looking to buy European mortgage lenders, according to its CFO DB Mortgage changes subprime lending criteria Banks break pledge to maintain a liquid market for UK covered bonds and suspend market-marking in the securities HSBC rumoured to be interested in buying parts of Northern Rock's business Goldman Sachs Group Inc.'s Global Equity Opportunities hedge fund reportedly lost 1.8 percent in the first week of September, extending the slide that led to last month's $3 billion cash injection after a 23 percent fall in August.

Merrill Lynch announces plans for job cuts at First Franklin Financial, its subprime lender Shares in Alliance & Leicester (UK's eighth largest bank) and Bradford & Bingley fall sharply as Northern Rock continues to plunge Spanish Finance Minister and Bank of Spain are forced to deny British press reports that quoted Northern Rock chief executive Adam Applegarth as saying that three Spanish banks had sought ECB help the previous week.

The Reserve Bank of Australia moves quickly to quash market speculation that regional lender Adelaide Bank had sought emergency cash reserves from the country’s central bank.

EUROCATALYST 2007: LIVE FROM MADRID

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4-Sep-07 5-Sep-07 5-Sep-07 5-Sep-07 5-Sep-07 6-Sep-07 6-Sep-07 6-Sep-07 6-Sep-07 7-Sep-07 9-Sep-07 10-Sep-07 11-Sep-07 12-Sep-07 12-Sep-07

13-Sep-07 13-Sep-07 13-Sep-07 14-Sep-07 14-Sep-07 15-Sep-07 15-Sep-07 17-Sep-07 17-Sep-07 17-Sep-07 17-Sep-07 17-Sep-07 18-Sep-07

© 2007 EUROCATALYST

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The Federal Open Market Committee reduce its rate for the first time since 2003, by 50 basis points, to 4.75 percent 18-Sep-07 The Bank of England says it would inject £4.4 billion into the system at its benchmark rate of 5.75 per cent in a two-day 18-Sep-07 “exceptional” tender. That brought overnight lending rates, which on Monday had surged to their highest levels in nearly six years, back down to 6.14 per cent.

Commerzbank announces plan to acquire 60 percent share in Bank Forum in the Ukraine for $600 million, with the 18-Sep-07 option to buy an additional 25 percent stake within 36 months KfW is reported to be considering selling its 38 percent stake in IKB, with several German banks said to be in the 18-Sep-07 running, including Commerzbank GE books $950 million loss on WMC shutdown 19-Sep-07 HSBC to close Decision One, a subprime mortgage unit, cutting 750 jobs, at a $880 million writeoff 21-Sep-07 Fortress Investment Group cuts off its sub-prime pipeline just over a year after buying sub-prime lender Nationstar 21-Sep-07 Mortgage.

Barclays reportedly preparing to sell FirstPlus, a sub-prime consumer loan business with a £4.5 billion loan portfolio, at 23-Sep-07 a loss, to escape exposure to credit risk IMF Global Financial Stability Report singles out UK subprime market as a key area of risk and warns that the credit 24-Sep-07 crunch will last longer and be more painful than many expect.

Media report cites Deutsche Bank sources as saying DB faces losses up to €1.7 billion euros linked to the subprime crisis. 25-Sep-07 Credit Suisse cuts 150 jobs in its MBS business due to US subprime crisis 26-Sep-07 SEC begins probe of whether credit-rating agencies faced Wall Street pressure to give top rankings to subprime 26-Sep-07 mortgage bonds Freddie Mac chief warns 40-45 percent change of recession caused by housing market downturn 27-Sep-07 Association for Financial Professionals urges SEC to review recently finalised rules regarding credit rating agencies NYT reports that Bear Stearns is close to selling a stake to either Warren Buffett or a financial institution (report lists 27-Sep-07 Bank of America Corp, Wachovia, and two Chinese companies, Citic Group and China Construction Bank Corp US Office of Thrift Supervision shuts down NetBank, the online bank that has suffered $2.5 billion in mortgage defaults 28-Sep-07 since 2006. The FDIC, which is named receiver, announces that ING Direct, part of ING Groep, will assume $1.5 billion of NetBank's insured deposits and that its customers would automatically be transferred to ING. ING will also acquire $724 million in assets.

EverBank of Florida announces it has acquired $700 million of NetBank mortgage assets 28-Sept-07 IKB says it expects to post loss of up to €700 million for 2006-7 fiscal year 28-Sep-07 Fitch Ratings places 128 subprime transactions "Under Analysis" as part of its monthly surveillance process. The 28-Sep-07 transactions represent $41.7 billion of debt outstanding. Fitch to issue a rating action within 30 days.

Dollar hits new lows, gold reaches new highs 28-Sep-07

special thanks - Everyone at FitchRatings (especially but not limited to: Eddie, Stuart, Kim, Diane, Hélène, Karen, Robbie, Rachel, Louise, Danny, Suzy

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- Baralides Alberdi - Helena Day - Alexandra Sleator-Langer - Fanny Borgström - Todd Groome - Tim Skeet - Michael Coogan - Michael Lea

4-5 OCTOBER 2007

- Alexander Batchvarov - Marc Bajer - Hoesli Labhart - Ron Roark - Dominic Swan - Udo van der Linden - Marcella Frati

- Juan Pablo Soriano - Rick Watson - Tammy Richardson - Valeria Picconi - Marco Pescarmona - Matt Gilmour - Jeannie Osborne

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Giacomo Trovato Steve Haggerty Paul Fenn Ted Lord Sandrine Guérin Joaquin Mongé David Ryan Sam Theodore Jim Dowell Tony Porter

- Giuliano Giovannetti - Deborah Dor - Dagmar Schemann Teuber - Kendall Schenkel - Kathy Siess

© 2007 EUROCATALYST