EBA recommends risk retention easing for NPL securitizations

EBA Tower 230x150
By Tom Brown
23 Oct 2019

Regulatory constraints could be eased for securitizations of non-performing loans (NPLs), according to a European Banking Authority (EBA) opinion paper published on Wednesday.

The opinion paper prescribes the easing of several regulatory capital constraints, specifically those around risk retention, in order to encourage the use of securitization as a tool for reducing bank NPL ratios.

The regulator recommends that independent servicers be entitled to discharge retention obligations where “its interests ...

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