The International Monetary Fund has called on investment banks to tighten-up their underwriting standards in securitisation, the financing technique at the heart of the credit crisis, in an effort to strengthen the weaknesses and “close the gaps” in the structured finance arena.

In its Global Financial Stability report this week, the IMF said new regulatory policy proposals should broadly focus on enhancing the underpinnings of banks’ originate-to-distribute models, including strengthening underwriting standards and improving disclosure of the underlying risks.