The Collins catalyst

Category: Capital Relief Trades ABS

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Dodd-Frank amendment could provide tipping point for US CRTs

The take-off of the US capital relief trades market has been predicted for several years. This CRT Premium Content article explores whether the increasingly onerous impact of the Collins Amendment could provide the tipping point.

This amendment to the 2010 Dodd-Frank Act, named after Senator Susan Collins of Maine, requires US banks that are entitled to use their own internal risk-based (IRB) models to determine risk weighted assets (RWAs) to also calculate RWAs according to the standardised methodology and to then apply whichever of the two is the toughest.

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