Grappling with uncertainty

Category: Capital Relief Trades ABS


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Capital relief trade issuers are incorporating structural features highlighted in the EBA’s risk transfer discussion paper in an effort to gain some regulatory certainty in the absence of any guidance. Challenges remain, though, as significant risk transfer (SRT) recognition will depend on negotiations between national regulators and banks.

“There are a number of grey areas that can affect the SRT status of a deal with national regulators,” says one source. This

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