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EBA streamlines risk transfer rules on securitisation 

July 8, 2014
Anna Brunetti, Reuters

The European Banking Authority (EBA) has unveiled the guidelines banks will have to follow for securitisations where they want offload the associated credit risk, raising the level of transparency and reporting required to receive capital relief.

The banking watchdog's Significant Risk Transfer publication is part of European regulators' efforts to boost securitisation not only as a funding source but also as a risk management tool.

This allows banks to obtain a degree of capital relief whenever they move securitisation risk off their balance sheet to a third party through specific procedures.

Lenders seeking capital relief will be asked to notify and report to national supervisors on the exposure they've transferred out on a quarterly basis, throughout the life of the transaction, and explain any changes to the level of risk transferred.

Read more: Reuters

 
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