The movers and shakers of Europe's mortgage-lending industry are to attend an unprecedented conference that starts in Madrid on Sept. 22 in an effort to find solutions in light of globalization and ensuing difficulties they currently face -- including dilution within the financial services industry and "an ongoing battle for the survival of the fittest."

The four-day conference is the brainchild of Toni Moss, the founding partner of EuroCatalyst BV, based in the Netherlands.

"EuroCatalyst 2002 is a collective attempt on behalf of all European trade organizations, rating agencies, most large lenders, investment banks, third-party administrators, servicers, technology providers and media to build a definitive and distinct European mortgage-lending community to parallel the size, scale and scope of the United States," she said.

"The dilemma lies in the fact that mortgage lending and housing finance are completely local activities, yet the funding of those mortgages is based on capital market structures which are global," she added. "Through this event, we hope to drive individual European market spaces to a Pan-European marketplace by focusing on mortgages as a strong European asset class as opposed to a series of national products."

The event will feature one of the most powerful lineups of European mortgage players ever assembled, with sessions focusing closely on the most critical issues facing the industry, including regulation, covered bond markets, product design, distribution, customer retention, administration, funding and secondary market activities, including securitization.

Moss expects the conference, to be held at the Westin Palace Hotel in the Spanish capital between Sept. 22 and 24, to become an annual gathering that enables those in the industry to communicate and network, enabling them to "find cross-border markets in Europe more rapidly" and build business relationships across borders in an increasingly global marketplace.

"We chose Madrid as the host of the inaugural conference because of the enthusiasm of the market and the strong outside interest in Spanish market opportunities," she said. The Bank of Spain will be opening the event.

One of the triggers for the conference is the imminent period of tremendous upheaval in the European lending landscape and the inevitable ensuing battle for survival, Moss said.

"The mortgage and housing finance markets of Europe are in transition due to the converging dynamics of European monetary union, electronic commerce infrastructure in mortgage funding, distribution and administration, rapid adoption of new business models and the increasing use of securitization to lower the cost of funds in mortgage lending," she emphasized.

And although mortgage-lending companies comprise the single largest consumer credit section in the majority of European markets, she adds, administrative and business practices are fragmented, labor-intensive, lacking in contemporary risk management and capital market efficiencies, and follow at the "trailing edge of the technology curve."

"Simply put," she said, "there has been no 'big stick' -- like the savings and loan crisis in the U.S. or the lingering banking crisis in Japan -- and no carrot, such as the vast, liquid capital markets of the U.S., to motivate change in the markets."

European mortgage lending remains a localized endeavor at the moment, with few participants operating outside national boundaries, although the few cross-border efforts at expansion have demonstrated the need for joint venture arrangements to provide local market knowledge as well as market acceptance and inclusion.

Despite the limited successes to date, however, globalization is the future, Moss believes.

"Regardless of the controversy over the erosion of social and cultural values, globalization is an irreversible fact of life," she said. "The way we respond and adapt will determine the extent of corporate and national market survival."

In purely economic terms, globalization encourages companies to expand abroad in order to win new customers, get a foothold in new markets and increase economies of scale through organic growth, joint venture or acquisition. But taking advantage of the opportunity to grow globally requires three distinct assets, Moss said -- the three Cs.

First, a firm needs concepts, the latest knowledge and ideas; next, it requires competence, the ability to operate at the highest standards, anywhere; and finally it needs connections, access to the resources of other people and organizations around the world.

And this is where EuroCatalyst 2002 comes in, bringing the disparate elements of Europe's lending industry together and providing those at its heart with the opportunity to meet each other -- whether they be potential allies or competitors.

"Several things distinguish this conference from other events," Moss said. "First, we're professionals from the lending industry itself, we know the players and the markets and we understand the issues they face. But assumptions about where the industry stands are guesswork; ultimately, we will all learn at the event.

"Second is the role of the 'Intellectual Catalyst,' a world renown figure from outside the mortgage industry who we ask to adapt his or her knowledge and experiences to our own. This person motivates, encourages and challenges our industry to push beyond existing limits," she said. "Third is the unique format of the conference."

Electronically interactive "board room" sessions cover the major aspects and critical issues of European lending, while "regional market" sessions provide a comprehensive overview of each market by at least six speakers. Speakers will also deliver new material in "marketing-free" presentations.

The keynote speech on Sept. 23 will be delivered by Esther Dyson, widely considered the world's most prominent technology figure and a key architect of the new global information order. "When Dyson speaks, entire industries respond," said Moss.

Judith Hardt, secretary general of the European Mortgage Federation, will then set the stage with an overview of the evolving European lending industry, followed by an interactive discussion concerning national market survival and where the industry is headed.

The question of capital market funding and investment strategies will then be addressed by Tamara Adler, managing director of Origination for Structured Finance Products in Europe for JP Morgan. Subsequent sessions will consider best practices and market developments in European mortgage administration as well as a comparison of European and U.S. lending models.

The second day of the conference will be devoted to regional market sessions.

"Ultimately, EuroCatalyst strives to create an open playing field in which companies can find each other to negotiate deals on their own terms, based on the strength of their own capabilities -- and ensuring that the opportunities are there for everybody to win," Moss emphasized.