EBA gives hope to SRT market

EBA cityscape
By Tom Brown
25 Nov 2020

The European Banking Authority has lifted the spirits of those working in the significant risk transfer (SRT) market by suggesting that call options and early termination rights should not disqualify a transaction from achieving SRT recognition, pushing back on proposals made by European Parliament members.

The EBA has produced its report on the SRT market, setting out rules to be followed before regulators accept that risk associated with securitized assets has been transferred sufficiently to allow a bank to reduce its capital allocated against the assets.

It aims to standardise the ...

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