Furthermore, Article 6 of the MLES, which is identical to Article 7 of the MLEC (123) and influenced by section 10 of the ETA, provides guidance as to when an electronic signature will be considered reliable and appropriate for the purpose of a specific document.
Clearly, Article 9(3) makes quite similar provisions to Article 7 of the MLEC and section 10 of the ETA.
Under the MLEC and the ETA, the electronic signature method must satisfy the reliability test.
131) The second option is that a strict technology-neutral regime as that of the MLEC (as it is currently in the ETA) should be maintained, and that section 10 of the ETA be replaced by Article 9(3) of the Convention.
Third, Article 7 of the MLEC and consequently the legislation of countries that follow this legal model (for example, section 10 of the ETA in Australia) do not adequately address the issue of appropriateness and reliability.
There are two explanations for the failure of the MLEC proposal.
In retrospect, it appears that prospective MLEC participants found this assumption and scenario less persuasive than an alternative view: that mortgage assets were not necessarily priced below fundamental values, but might still have some distance to fall.
Perhaps the MLEC will allow an orderly write-down over the course of the next year or more, softening the blow and bringing investors back into the market.
If MLEC has the effect not of clearing the market but of preventing it from clearing by throwing good money after bad, then we risk a banking paralysis of the kind Japan suffered during the 1990s because its banks refused to write down bad assets.