SFA Research Corner: Trust but Verify: Lessons from Tricolor

Tricolor’s collapse showed how fraud can slip past even well-structured securitizations — not because the structures failed, but because the underlying data was compromised. The episode offers the market an opportunity to strengthen independent checks, apply safeguards more consistently, and encourage best-practice standards. By reinforcing these measures and empowering those closest to the collateral with greater oversight, the industry can reduce blind spots, adapt monitoring to evolving risks, and ensure securitization remains a resilient and indispensable tool for raising capital.