Sector developments and company hires

The FHFA has published a final rule that amends the Enterprise Regulatory Capital Framework (ERCF) by refining the prescribed leverage buffer amount and risk-based capital treatment of retained credit risk transfer (CRT) exposures for Fannie Mae and Freddie Mac. The amendments reflect the feedback the FHFA received last year and aim to advance its mission of ensuring the enterprises are able to support the housing market throughout the economic cycle.

The final rule: replaces the fixed leverage buffer equal to 1.5% of an enterprise's adjusted total assets, with a dynamic leverage buffer equal to 50% of the enterprise's stability capital buffer; replaces the prudential floor of 10% on the risk weight assigned to any retained CRT exposure, with a prudential floor of 5% on the risk weight assigned to any retained CRT exposure; and removes the requirement that an enterprise must apply an overall effectiveness adjustment to its retained CRT exposures. The final rule also makes technical corrections to various provisions of the ERCF that was published on 17 December 2020.

The effective date for the ERCF amendments and technical corrections in this final rule will be 60 days after publication in the Federal Register.

In other news…..

North America

Elementum ramps up its investment team in Bermuda with the hire of a new vp. Alaina Cubbon joins the team as vp of portfolio management from the Hiscox ILS investment team in Bermuda. In her previous role, Cubbon was responsible for portfolio construction, reporting, valuation, and the development of systems and products. She will concentrate on portfolio construction and underwriting for the firm’s CRI-inclusive funds, as well as helping the firm enhance its ESG management framework and approach. Cubbon brings extensive experience in ESG as well as the reinsurance market, having also held roles as vp of analytics and research at Hiscox Re in Bermuda, and as a member of the property underwriting team at Catlin underwriting in London.