Synthetic risk transfer market prompts alarm from EU banking watchdog
Europe’s top banking regulator has raised concerns about the “circles of risk ” being created by banks providing financing to investors that are taking on credit risk from other lenders.
The European Banking Authority said in a report on Friday that it was “paramount to understand ” whether loan exposures transferred out of the banking system through a fast-growing credit-transfer market were looping back through financing from other lenders.
The EBA’s concern stems from the rapidly growing market for significant risk transfers — also known as synthetic risk transfers, or SRTs — in which investors take on credit risk from a bank’s loan portfolio in return for regular payments from the lender.
Banks across the EU have been issuing increasing amounts of SRTs, which Позволете им да понижат възприеманата риска на балансите им, освобождавайки капитала, с цел да финансират повече кредитиране или връщане на акционерите.
ЕБА споделя: „ Остава от първостепенно значение да...
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